A spokesman from the steel plant in Jilin province that was the scene of a deadly protest on Friday has denied reports that 30,000 workers were involved.

Zhang Zhidong, spokesman for the Tonghua Iron and Steel Co, said it would be impossible for the protest, which culminated in the beating death of an executive, to have involved 30,000 people, as was reported by Reuters and AFP.

"We only have 13,000 on the payroll," he said.

A work group organized by the provincial government to investigate the incident said the executive who was killed, Chen Guojun, had been sent to the plant by the Beijing-based Jianlong Heavy Machinery Group to conduct a merger discussion in an effort to take a controlling share in the Tonghua Iron and Steel Group.

Wang Xidong, deputy head of the Jilin provincial State-owned asset commission, said the proposed change in ownership would only have affected managerial personnel, rather than the rumored cuts to the workforce that stirred the protest.

According to police, around 1,000 protesters gathered in the company's office building on Thursday morning protesting the potential takeover. The protest turned violent when the workers tried to stop the production line, at which point Chen was injured.

The injured manager is understood to have fled to a worker's dormitory, where he was allegedly discovered by a small group of protesters and beaten, while others threw bricks at arbitrators and police in an apparent bid to prevent a rescue.

Chen died in hospital at 11 pm Friday.

Jianlong has been Tonghua's second-largest share holder since 2005.

The planned takeover has now been shelved.

"The provincial government has agreed to terminate the merger discussions after the protest, and the company's production has been resumed," Zhang said.

Workers are understood to have feared that Jianlong, a private company, planned to cut manpower after taking control of the company.

Jianlong had been poised to take over Tonghua earlier this year but that deal fell through.

"Jianlong stopped the merger discussions at the beginning of this year, when our company suffered losses amid the financial crisis," said retired Tonghua worker Zhang Guanghui. "It resumed the talks, as the company's business recovered. Why should we let such a private firm to take control of us?"

Another worker, Sun Dejun, said salaries had not increased during the past three years, ever since Jianlong bought a large stake in the company.

"Jianlong has always called for payroll cuts to improve efficiency. Workers have been worrying about their job security," he said.

"I retired from the company this year. I now live on my retirement pension of 1,000 yuan ($146) a month, which is in sharp contrast to the yearly pay of 100,000 yuan for mid-level managers in the company," said a worker who declined to give his name.

State-owned asset commission official Wang said the Tonghua group was the largest State asset in Jilin. It accumulated a deficit of 900 million yuan in the first three months of the year after the iron and steel business was hard hit by the global financial crisis.

However, the company, with annual production capacity of 7 million tons, saw its business recover in June, when it reported 40 million yuan in profits. The profits doubled to 80 million yuan in July.

"The merger had been approved by the provincial government, which is expected to help Tonghua reach the development goal of hitting 10 million tons in annual throughput," Wang said.

Workers from State-owned firms, especially retired workers, often believe that State-owned firms are "iron rice bowls" that can guarantee lifelong employment and secure pay, and many have opposed mergers with private firms, Wang said.

(Xinhua News Agency July 29, 2009)