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VW China partner graft probe widens

China’s anti-graft authorities have launched investigations of 50 executives at state-owned FAW Group Corp, one of the country’s Big Four automakers and a partner of Volkswagen AG, sources said.
 
The latest target of prosecutors in Jilin province, where FAW is headquartered, is the group’s former deputy general manager An Dewu.

Two executives at FAW-Volkswagen Automobile Co., a joint venture between FAW and Volkswagen, were detained last month. They were the joint venture’s former deputy general manager, Li Wu, and Audi sales division deputy manager, Zhou Chun.

VW Group also owns Audi.

Local media reports connect Li and Zhou to a corruption scandal in 2012 when FAW-Volkswagen vice president Jing Guosong was investigated for engaging in unauthorized car sales for personal gain.

But according to sources close to the FAW, authorities are now investigating about 50 executives at the group and some of its joint ventures.

The Central Commission for Discipline Inspection recently announced that FAW-Volkswagen’s Audi sales division had misused company funds for overseas sight-seeing tours. Six executives, including the joint venture’s President Zhang Pijie and party secretary Zhong Liqiu, were punished.

Party secretary of Tianjin FAW Toyota Motor Co, Wang Bing, and assistant general manager of the FAW Group, Wang Gang, were punished for misusing public vehicles.

Media reports also disclosed that the detained former security chief Zhou Yongkang’s sister-in-law invested in Audi 4S stores in Jiangsu province.

Sources: Reuters, China Business Journal (中国经营网)

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Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.

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