Lawsuit Reveals Plans For Mississippi Car Plant

JACKSON, Miss. (AP) -- A federal lawsuit between two feuding Chinese businessmen has revealed what appears to be an ongoing negotiation to build a multibillion dollar hybrid car plant in northern Mississippi.

The case leaves many questions unanswered, but a federal judge seemed persuaded that the business proposal was serious. Local officials confirmed negotiations for the factory had taken place.

"This is an extraordinarily complex case involving a $6.5 billion project, proposed to be financed by Chinese investors, to build a hybrid car factory in Tunica, Mississippi," U.S. District Judge Michael P. Mills wrote in a 29-page filing. The lawsuit was filed in March in U.S. District Court in Oxford and unsealed Tuesday.

At the heart of the lawsuit is whether two Chinese businessmen are partners or one was an employee of the other and what exactly were the terms of their "handshake" business deal.

Mills said the parties involved in the case have worked with Mississippi Gov. Haley Barbour, the Mississippi Development Authority and Tunica County "to lay the groundwork for the project."

Barbour's spokesman, Dan Turner, said Wednesday that state officials don't discuss ongoing economic development projects. Tunica County spokesman Larry Liddell said county officials don't discuss such projects either, though he did confirm there had been negotiations.

The dispute involves two Chinese men, Benjamin Yeung and Charles Wang, their companies and other investors. Wang said Yeung had agreed to put up $100 million to $200 million to get the project rolling, according to court documents. Yeung denied making that agreement.

"According to defendants' version of the facts, the parties have proceeded in the hybrid car project primarily by means of a 'handshake' deal whose terms are largely uncertain," Mills wrote. "This court is informed by counsel for defendants that this business practice is common in China, where considerations of 'honor' and 'face' are paramount, and where it can be considered rude to demand that the terms of a contract be put in writing."

The case is further complicated by nearly two dozen third parties and a web of related corporations, some with similar names such as the plaintiff, Hybrid Kenetic Automotive Holdings Inc., and the defendant, Hybrid Kenetic Automotive Corp.

"The most that this court can say with certainty about the hybrid car project is that 1) it involved an agreement by two men -- Benjamin Yeung and Charles Wang -- to work together in some capacity to pursue the project and 2) it has broken down in rather spectacular fashion," Mills wrote.

Attorneys listed in court records did not immediately respond to messages.

Mills said he wants the case resolved soon "since it does appear that the framework for an actual car factory employing tens of thousands of workers may be in place."

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