Former Mexico governor to face trial tied to Kia tax sweeteners

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MEXICO CITY (Reuters) - A former governor of Mexico’s northern Nuevo Leon state will be tried for alleged improprieties linked to tax incentives his administration gave to South Korean carmaker Kia Motors to build a plant, a local government source said on Tuesday.

In June, an anti-corruption prosecutor accused former governor Rodrigo Medina and 30 others including former officials, family and friends, of corruption that drained some 3.6 billion pesos ($195.87 million) from state coffers.

A judge late was set to rule on Tuesday that Medina should face trial although the timing was not yet clear, the source said.

Current independent Governor Jaime Rodriguez’s administration has been demanding that Kia renegotiate some of the incentives pledged in an accord struck in 2014 under Medina.

In June, his government said it had reached a deal with Kia to cut the tax breaks it would receive for building its first Mexican plant in the state from 28 percent of the amount invested by the firm and its suppliers to 10.5 percent.

Kia Motors started production at its $1 billion factory in Mexico on May 16, with plans to increase its total production capacity to 300,000 vehicles a year, from this year’s projected 100,000.

($1 = 18.3800 Mexican pesos)

Reporting by Gabriela Lopez and Anahi Rama; Editing by Kim Coghill