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China Brilliance shock for MG Rover

Rumours that MG Rover's joint venture with China Brilliance is foundering were further fuelled this morning with the news that the Hong Kong Stock Exchange has suspended trading in the Chinese carmakers' holding company.

Suspension of trading was requested by Brilliance China Automotive Holdings Limited pending the issue of an announcement relating to “price sensitive information.”

Concern at the deal first surfaced earlier this year when Brilliance chairman Yang Rong - thought to be the only proponent of the MG Rover tie-up on the Brilliance Board - was ousted.

Although Mr Rong's departure was initially linked to investigation of financial irregularities, some industry commentators are already pointing to his ousting as the start of a move by the carmaker to back-track on the deal.

One reason may be China Brilliance's reluctance to put plans to build BMWs in the country in jeopardy. Although talks between Brilliance and BMW are at an advanced stage, and cars could go into production by the end of this year, the deal is still waiting for the go-ahead from the Chinese Government.

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