BMW China partner falls on Ministry rejection

Bloomberg News (Beijing) - Bayerische Motoren Werke AG (BMW)’s Chinese partner fell the most in almost four weeks in Hong Kong trading after China’s environment ministry rejected a factory-expansion application.

Brilliance China Automotive Holdings Ltd. (1114) dropped 2.2 percent to close at HK$9.28, the biggest decline since July 3, while the benchmark Hang Seng Index rose 0.5 percent.

BMW Brilliance Automotive Ltd., a joint venture between the German carmaker and Brilliance, failed to get approval from the Ministry of Environmental Protection for the third phase of its plant in the northeastern Chinese city of Shenyang, according to a statement dated July 26 that was posted on the ministry’s website.

The ministry asked for additional documents and the rejection wasn’t final, said Alexander Bilgeri, a spokesman at Munich-based BMW. Such events are routine, Bilgeri said.

The ministry plans to return the automaker’s environment impact study, citing inadequate analysis on the projected volume of wastewater, according to the statement. BMW Brilliance’s proposed plant expansion also failed to meet government targets to cut pollutants, while the first phase of the factory has yet to pass an inspection, the ministry said.

Getting lower-level bureaus to sign off on manufacturing projects are among the first regulatory steps for foreign companies before they receive central government approval.