The German car parts supplier Continental has largely replaced its tires sales management team in China based on corruption suspicions, according to a person familiar with the situation.
There are several people suspected of having gained financial benefits on a personal level through business deals conducted in the company, and as the same source has it, the issues were detected through internal checks.
The new management has been in charge since July with Continental refusing to comment on the news while the case is underway.
The daily financial Handelsblatt has previously reported on the corruption case, stating that the company was taking legal steps and that the extent to which the former employees enriched themselves was unknown at the moment.
On another note, the European automotive supplier has recently announced it would positively modify its full year profit guidance outlook following second quarter results in 2015 that came with a boost in profits.
The profit guidance comes after results from the first six months of this year exceeded the company’s expectations due to a turnaround in the European auto market. Continental reported a new threshold for the adjusted profit margin would be of around 11% for this ongoing year, growing from a previous prediction of 10.5%
Continental witnessed a rise in revenue of 18% up to €10 billion with second quarter earnings increasing 25% to €1.25 billion on a year-to-date base. The auto parts supplier has also changed its annual free cash-flow outlook to more than €1.8 billion after a former estimate of €1.5 billion.