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August 27, 2014

CHINA: FAW-VW JV execs eyed in corruption probe

A Chinese corruption watchdog reportedly is investigating one former and one current executive at Volkswagen's FAW-Volkswagen Automotive joint venture for "seriously violating the law."

A Chinese corruption watchdog reportedly is investigating one former and one current executive at Volkswagen’s FAW-Volkswagen Automotive joint venture for “seriously violating the law.”

According to Reuters, the announcement, posted on the website of the Central Commission for Discipline Inspection of the Communist Party of China, identified the two as former deputy general manager Li Wu and Zhou Chun, deputy general manager of the joint venture’s Audi sales division.

The statement said the investigation came after the watchdog recently launched a special inspection at FAW Group.

The joint venture with state-owned FAW is one of the two car-making ventures the German automaker has in China – the other is with Shanghai Automotive (SAIC) which is also a JV partner with General Motors’ Chinese unit.

Reuters noted Audi and other foreign brands like Daimler’s Mercedes-Benz and Fiat’s Chrysler have been under investigation in China over their pricing practices as the Beijing government steps up enforcement of anti-monopoly laws.

Earlier this month the National Development and Reform Commission (NDRC), China’s price regulator, said it would punish Audi and Chrysler for monopoly practices.

It was not immediately clear if the two probes were related, the news agency noted.

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