Oct. 28 – According to a local government official in Guangdong province the government has used more than RMB24 million (US$3.5 million) of public funds to compensate 7,000 former employees of the toy maker Smart Union Group, reports Xinhua.

Xu Hongfei, deputy head of Zhangmutou, said the town government has agreed to shoulder all the laid-off employees from the firm’s two factories.

“The boss is nowhere to be found, so the government is paying the wages owed to the workers,” he told Xinhua.

While the government has agreed to cover back pay, it will not, however, finance any redundancy payments owed by the firm, Xu added

In neighboring, Shenzhen, the city government has so far used RMB3.7 million of pubic funds to cover back pay owed to around 800 workers affected by the closure of Chuangyi Toys Co. Ltd.

According to Xinhua, the local labor authorities will auction off the company’s seized assets. Since June, the Shenzhen labor bureau has paid out more than RMB10 million in back wages owed to laid-off workers.

The agency has released the names of 30 companies that owe a total of RMB12 million in back pay to their employees; demanding that their executives report to the local labor authorities within 30 days.

Also in Shenzhen, the government of the Longguan district is still deciding on a course of action following the closure on Monday of the Hong Kong funded Gangsheng Electronic (Shenzhen) Co Ltd.

“A working group comprising representatives of the police, courts, and the labor and social security bureau, has been set up to investigate the case,” Peng Gang, an official with the district publicity department, told China Daily.