South Korea to File Charges Against Audi Volkswagen Head – Wall Street Journal

Posted: Tuesday, January 19, 2016

Thomas Kuehl, head of Volkswagen Korea, and Johannes Thammer, head of Audi Volkswagen Korea, facing questions about the company’s emissions scandal from a South Korean parliamentary committee in October; the Ministry of Environment said Tuesday it would file a criminal complaint against Mr. Thammer.

SEOUL—South Korea’s Ministry of Environment is turning up the heat on Volkswagen AG


over its emissions scandal, saying the car maker’s local unit and its chief will be brought up on criminal charges.

Rejecting the company’s recall plans, the ministry said Tuesday it would file criminal complaints against Audi


Volkswagen Korea and Managing Director Johannes Thammer with the Seoul Central Prosecutor’s Office later in the day.

“Recall plans the company submitted to us earlier this month were insufficient and lacked key information, and thus are unacceptable,” the ministry said in a statement. The company, which admitted in September to using software to cheat on U.S. emission tests of some of its diesel cars, is already being sued in U.S. federal court by the U.S. Department of Justice, which seeks billions of dollars in penalties, and faces civil lawsuits from shareholders and customers.

After conducting its own emissions tests, South Korea in November fined Volkswagen 14.1 billion won ($12.3 million) and ordered a recall of more than 125,000 vehicles, including Volkswagen Tiguans and Beetles and Audi Q3s, Q4s and Q5s. The government said the recall plans had to show how the car maker would improve emissions results and maintain fuel efficiency after removing the cheating software.

Volkswagen apologized to Korean consumers and on Jan. 6, the deadline, submitted a recall proposal. But the ministry said the proposal fails to explain how the problem occurred and how it would be fixed, as required by law.

Under Korean environmental law, conviction could result in up to five years in prison and a fine of up to 30 million won.

Mr. Thammer and other Volkswagen officials, including powertrain-development chief Friedrich Johann Eichler, visited the ministry earlier Tuesday to offer a technical briefing on the proposed fix.

“Audi Volkswagen Korea is doing its utmost to resolve the emissions issue,” a representative for the Korean unit said in a statement. “We’ll offer further explanation on our proposal.”

Sales of German cars in South Korea have soared since a 2011 free-trade deal cut duties on vehicles imported from Europe. Imports from Germany last year totaled 167,043 vehicles, up 23%, following a 29% increase in 2014. Nearly a third of all cars imported into South Korea in 2015 were Volkswagens and Audis.

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