Prosecutors Indict BMW Korea Corporation and 4 Executives for 'Concealing Parts Defects'... Former CEO and German Corporation Not Prosecuted

Building housing the BMW Korea office in Jung-gu, Seoul.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] BMW Korea corporation and its executives have been brought to trial on charges of concealing defects in diesel vehicle parts that could lead to fires while driving.

This comes about two and a half years after the prosecution received the case from the police in November 2019, related to the series of BMW vehicle fires in 2018 that caused anxiety among drivers on the road.

The Criminal Division 5 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Park Gyu-hyung) announced on the 16th that it has indicted four individuals, including former BMW Korea AS department head Jeon (50) and manager Jeong (47), as well as BMW Korea corporation, without detention on charges of violating the Automobile Management Act.

According to the prosecution, they are accused of knowing about defects in some BMW diesel vehicles that could lead to vehicle fires from August 2016 to April 2018 but concealed them.

Investigations revealed that they were aware that a hole could form in the intake manifold (a plastic pipe supplying recirculated exhaust gas and outside air to the diesel engine cylinders) due to a malfunction in the engine exhaust gas recirculation device (EGR), which could lead to vehicle fires. However, they concealed the defect by either not submitting the required related documents to the government or submitting them with relevant expressions deleted.

The EGR is a device that recirculates part of the exhaust gas into the 'intake manifold' to reduce nitrogen oxide (NOx) emissions from diesel vehicles.

According to the results of a joint public-private investigation team formed by the Ministry of Land, Infrastructure and Transport, cracks in the EGR cooler cause coolant leaks, which mix with soot to form deposits. When high-temperature exhaust gas flows into the EGR cooler under these conditions, sparks occur, creating holes in the intake manifold and leading to fires.

The prosecution indicted Jeon, who was responsible for overall quality control and defect correction at BMW Korea, and Jeong, the department head in charge, along with other employees directly involved in concealing the defects. However, two other employees who admitted to the charges but whose involvement was not serious were given a non-prosecution disposition.

Additionally, the prosecution judged that Kim Hyo-jun, president of BMW Korea, who was referred by the police with a prosecution opinion, was unlikely to have ordered the concealment after analyzing emails and noting that he only inquired about the fire incidents and received related reports from responsible executives after the fires occurred, and thus was cleared of charges.

Other directors and executives who were accused were also cleared of charges due to lack of work-related involvement.

Meanwhile, BMW’s German headquarters and its executives were cleared of charges on the grounds that they are not subject to the obligation to disclose defects under the Automobile Management Act.

Regarding fraud charges that BMW Korea and the German headquarters knowingly sold over 9,000 vehicles with defects, the prosecution found it difficult to recognize intent to defraud the vehicle sales proceeds, considering that a significant period had passed since production and sales, defects were found only in some vehicles with accumulated mileage, and that BMW Korea and the German headquarters took considerable measures to correct the defects at substantial cost, and thus dismissed the charges.

The prosecution, which began investigating after the police referral in November 2019, conducted a search of BMW Korea in September 2020 and has continued supplementary investigations by summoning related parties and witnesses until recently.

A prosecution official stated, "This case, which became a social issue due to multiple fires caused by defects concealed for a long time by the automobile importer despite the defects affecting safe vehicle operation, was handled after thorough investigation and meticulous legal review."

This content was produced with the assistance of AI translation services.