Tamil Nadu government today dismissed reports that alleged corruption in the state had prompted car-maker KIA Motors to set up plant in Andhra Pradesh, saying the auto major had acted on its own accord in the matter.

Rebuffing media reports in this regard, the government clarified that the Korean auto-major's decision to set up its greendfield unit in Andhra Pradesh was based on its "internal policy" and that Tamil Nadu continues to remain a favoured investment destination.

Responding to media reports alleging that corrupt practises in allocation of land had led KIA Motors to shift to Andhra Pradesh, it said, "The whole story is totally baseless and done with an intention only to malign the Government."

An official release said the state Industries Department had in June-July 2016 invited KIA Motors to set up factory in Tamil Nadu when it was scouting for locations in the country to establish a manufacturing facility.

"The Government of Tamil Nadu offered a structured package of support including land, power, water, fiscal incentives and single window facilitation to the company", the release said.

Noting that the company undertook a "feasibility study" to set up plant outside Korea, the release quoting KIA Motors CEO and President, Han-Woo Park said he expressed 'regret' for not able to consider Tamil Nadu "due to business needs and requirements of the company".

Park had also clarified that his company does not set up manufacturing units in states which also has the facilities of Hyundai Motors, the parent company.

"Under such business needs and requirements of our company and stakeholders, I hope you kindly understand that we have not established our overseas plants in same states were plants of Hyundai Motor Company are located such as in United States, China, Europe", Park was quoted as saying in the release.

Reiterating that KIA Motors decided not to set up factory only due to "their internal policy", the government said, "Hyundai Motor India (the Indian subsidiary of Hyundai Motor Company) is a major shareholder in KIA Motors has announced additional investment in existing unit at Sriperumbudur to the tune of Rs 5,000 Crore".

"This is a testimony to the fact that the Government of Tamil Nadu has been extending complete co-operation and striving to provide best investment opportunity to all industries", the release said.

Hyundai Motor India currently has two manufacturing facilities at Irungattukottai, SIPCOT Industrial Park, producing several models across segments. It also exports to nearly 92 countries.

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