More than 100 senior managers of FAW are investigated as $1.5 billion is missing in what seems to be corporate corruption.
It seems that the corporate corruption problem which spreads in China has reached the nation’s second largest automaker, the First Automobile Works Group, or FAW. After $1.5 billion has been reported missing from the company, the automaker’s Chairman has resigned and other 100 senior managers are under investigation. Although concerns regarding this issue have stemmed in late 2011, the scandal has reached a high level during the past days.
In 2012 FAW manufactured around 3.6 million vehicles in China, ranking the second among the automakers in the country. FAW has several alliances with foreign automakers such as Toyota, Mazda and GM, but its largest partnership is with VW and Audi.
According to Chinese magazines’ reports, almost RMB 10 billion has been reported missing from the company’s capital, rising suspicions of embezzlement. This issues comes less than one year after a senior executive in the FAW-VW JV has been probed for corruption. Although the company has tried to defer the problem and hoped to ride out the crisis, the Communist Party allowed the case to air in the media despite a potential embarrassment to government officials.