Involved in Volkswagen Scandal
Renault Samsung was put in a trouble of replacing its CEO. With the Volkswagen-gate spilling over to Park, the prosecution even applied for an arrest warrant for Park. Considering a CEO’s reputation’s impact on his or her company, this development is expected to have a big negative impact on the automaker’s management.
The Seoul Central Prosecutors’ Office sought an arrest warrant against Park Dong-hoon, a former CEO of Volkswagen Korea who took office as first Korean CEO in April. Prosecutors charged Park with a violation of the Air Environment Preservation Act, the fabrication and use of private documents and the obstruction of justice.
On July 8, Park was grilled as a suspect on the charge of fabricating a test scorecard to pass gas emission, fuel efficiency and noise certification from August 2010 to February last year. Park took office as first CEO during the establishment of Volkswagen Korea in 2005 and served until 2013.
The possible arrest of Park cast a dark cloud over the management of Renault Samsung in the second half of this year. This is because his absence may hamper 2016 collective bargaining that has been in progress since the middle of July and the successful launch of the QM6, a strategic model to be released in September. A court review of his arrest warrant will determine whether or not he will be arrested around July 29.
It is concerned that if Park is arrested, it will deal a big blow to the French automaker’s business performances this year. That will throw a wet blanket on its good performance in the first half of this year.
In the first half of this year, Renault Samsung recorded an 8.7% increase in global sales from a year before as strong sales of the SM6 fueled its sales in the Korean market. Even through the company become one step closer to this year’s business goal of “selling 100,000 units in Korea and ranking third in the Korean market, the Volkswagen-gate dragged down the company.