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South Korea to slap VW with record fine

December 7, 2016

South Korea's corporate watchdog has hit the local unit of German car maker Volkswagen with a record fine. The East Asian country will also pursue VW executives over false advertising on vehicle emissions ads.

Südkorea Seoul VW Zentrale Durchsuchung
Image: picture-alliance/dpa/Yonhap

German auto maker Volkswagen's worldwide woes continue: On Wednesday, South Korea's Fair Trade Commission (FTC), the country's corporate watchdog, fined Volkswagen's local unit nearly 37.3 billion won ($32 million, 29.7 million euros) for false advertising on vehicle emissions. The FTC said it would also file criminal complaints against five current and former executives of the company.

"Audi Volkswagen Korea made false advertisements about its cars, claiming they meet the emission requirements and have better gas mileage," the FTC said.

Volkswagen had advertised in South Korea that its cars met European emissions standards and that its diesel cars were environmentally friendly. The fine is the largest the FTC has ever imposed for false advertising.

The FTC announced that prosecutors would investigate Volkswagen's headquarters, its South Korean unit and five former and current executives, including André Konsbruck, currently vice president of sales for the Americas at Volkswagen unit Audi, and Terence Bryce Johnsson, Audi's Head of Sales Overseas.

Audi Volkswagen Korea (AVK) said it had not been formally notified of the regulator's decision. "AVK is committed to rebuilding trust with the authorities and with customers and other stakeholders in Korea," it said in a statement.

South Korea has already fined Volkswagen 17.8 billion won for emissions-cheating, and arrested one local Volkswagen executive on accusations including fabrication of documents and violation of air quality laws.

The sales suspension imposed in August slammed the brakes on the German automaker's breakneck growth in South Korea, a market dominated by homegrown rivals like Hyundai Motor and Kia Motors.

Volkswagen has admitted that it installed illegal software to cheat emissions tests in some 11 million cars worldwide. In response to the scandal, South Korean authorities launched an investigation into more than a dozen foreign car manufacturers which has resulted in a ban on the sale of almost all Volkswagen models.

bb/uhe (Reuters, dpa)

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