Hunan firework manufacturers sue govt over shutting down their factories

A court in Central China's Hunan province has accepted a case filed by 27 firework manufacturers against the provincial government for refusing their administrative review request over a government decision to shut down their factories.

The intermediate people's court in the provincial capital, Changsha, said the decision complies with the law, adding that the two sides could visit the court's website for updates on the case, according to a written notification the companies disclosed on Sunday.

All 46 firework manufacturers in Qidong county were shut down in December last year after the Hengyang city government, which has jurisdiction over Qidong, issued a notification in October 2014 to shut down all firework manufacturers in the city within three years.

However, the Qidong government only agreed to pay 30 percent of the value of the manufacturers' facilities, forcing 39 companies to turn to administrative review.

Chen Junming, legal representative for Shenghua Firework, said the company's annual production was estimated to be worth 60 million yuan ($8.9 million) before it was shut down, adding that the government only promised to pay compensation of about 4.8 million yuan, despite the manufacturer's facilities being worth about 16 million yuan.

"The company owes debts of almost 10 million yuan, which includes 4.3 million yuan in loans from banks," Chen said. "I have been under great pressure due to the debts, as I may be sued by the creditors. I hope the government allows us to resume production or fully compensates us according to the asset valuation."

The companies made their review request to Hunan province's legislative affairs office on Feb 4, asking the office to deliver a verdict that the government's decision to shut down all firework manufacturers was illegal and that the economic losses of the factories should be fully compensated, while 12 of the companies withdrew their request in May before it was recently refused.

The office said the companies should have known that their factories would be shut down, as the government had organized talks with them and carried out asset valuations between late 2014 and late last year, adding that such companies had failed to file an administrative review request within 60 days, in accordance with law, the Beijing Times reported.

However, lawyer Tu Siyi said that while companies could file administrative review requests within 60 days of being told their rights, they were never told their rights, adding that there is no time limit to request an administrative review under such circumstances.

Chen Yongjun, head of Xiangzhang Firework, said all firework manufacturers in Qidong were built in accordance with national standards, and the local government did not consult them before asking them to shut down.

He said they only knew they could turn to administrative review after seeking advice from a lawyer in January.

A request for interview sent to Hunan province's legislative affairs office went unanswered.

Contact the writers at houliqiang@chinadaily.com.cn