Jianlong Steel had previously purchased a 36.19% stake in TISG in 2005 during the privatization attempt launched by the Chinese government, and despite not having a majority representation, Jianglong Steel Holdings nonetheless managed to have most of the managerial staff demoted and replaced by managers from Jianglong, under the claim of attempting to improve the performance of TISG.
However, the managerial shake up did not bring improvement as Jianlong had promised, but instead, TISG continued its downward spiral, resulting in most of TISG workers losing their pay, with many of them suffering in the harsh cold of winter when their heat was turned off as they could not afford to pay the heating bills.
[4] After the news, some 30,000 disgruntled Chinese steel workers clashed with riot police in protest over a takeover deal.
Production and the status quo returned on July 27 at the Tonghua Iron and Steel Group (TISG) after top provincial officials demanded peaceful settlement of the incident,[3] and announced via Tonghua television and radio that Jianlong will never be involved in the reorganization of TISG.
[6] Workers of TISG, as well as many local residents have suspected that many corrupted governmental officials were involved in the TISG privatization reorganization plan to embezzle the state asset, while the Jilin provincial officials claimed that the riot was a result of agitators, as claimed by the spokesman and deputy director of the Jilin Provincial National Asset Committee (吉林省国有资产委员会), Mr. Wang Xidong (王喜东) on the emergency news conference held at the 5:00 PM on July 27, 2009.