South Korea Files Criminal Complaints and Hefty Fine on VW Over Diesel Car Advertising

South Korea is continuing its crackdown on Volkswagen over the diesel emissions cheating scandal, and yesterday filed criminal complaints and a record high fine for false advertising.

The government said it will also be filing criminal complaints against five former and current executives at the German automaker’s South Korea division for their part in the advertising claims. VW is being hit with the country’s largest fine ever of 37.3 billion won ($31.87 million) for false advertising in its diesel car ads.

The five former and current executives include Andre Konsbruck, currently vice president of sales for the Americas at Volkswagen unit Audi, and Terence Bryce Johnsson, Audi’s head of sales overseas. South Korea’s Fair Trade Commission said it would ask prosecutors to investigate VW’s headquarters, its South Korean office, and the five executives.

The Korean FTC alleges Volkswagen made “false, exaggerated or deceptive” claims in the advertisements. Going that route could bring jail terms of up to two years or fines of up to 150 million won ($129,357), a commission official told reporters.

The regulators are taking VW to task for advertising environmentally friendly vehicles that met air pollution standards even though they were equipped with devices designed to cheat on government emissions tests.

Filing criminal charges and slapping on the highest-ever deceptive advertising fine is another sign the South Korean government is continuing its hardline approach with VW. The government had already suspended most of its sales in the country since August until the investigation is completed. That put the brakes on VW’s fast-paced sales growth in the country.

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South Korea had already fined VW 17.8 billion won ($15.3 million) for emissions cheating. One other criminal charge had been placed with the arrest of a local VW executive accused of fabricating documents and violation of air quality laws.

Audi Volkswagen Korea told Reuters it had not been formally notified of the regulator’s decision in the criminal charges and false advertising claims.

“AVK is committed to rebuilding trust with the authorities and with customers and other stakeholders in Korea,” the company said in a statement.

The German automaker is anxiously waiting for other governments to finalize penalties and class-action lawsuits to be settled as total financial cost hovers. In the U.S. market, the company has already agreed to spend up to $16.5 billion to settle diesel-emissions cheating allegations, and still may face billions more in fines.

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