U.S. prosecutors investigate Hyundai car recalls

hyundai ix35 fuel cell

Hyundai Motor and affiliate Kia Motors are being investigated by U.S. prosecutors over if vehicle recalls were conducted appropriately, a person stated and documents reviewed by Reuters revealed.

Shares of the South Korean firms dropped on Thursday on concerns the investigation could lead to fines and more recalls, while industry data revealing a sharp drop in China’s passenger car retail sales in the first half of November spooked investors further.

Hyundai and Kia, together the world’s fifth largest automaker, recalled almost 1.7 million automobiles in 2015 and 2017 in the United States in one of their biggest recalls in the nation, mentioning an engine failure that boosts the risk of a crash.

The U.S. Attorney’s Office for the Southern District of New York (SDNY), part of the U.S. Department of Justice (DoJ), has started a criminal probe, the person with direct knowledge of the issue informed Reuters.

It remains to be seen if the investigation will result in charges, the person added. If criminal charges are submitted, it could lead to hefty fines for the automakers.

The DoJ is collaborating with the U.S. transport regulator, National Highway Traffic Safety Administration (NHTSA), on the investigation, the person stated, asking not to be identified as the matter is private.

Nicole Navas Oxman, a DoJ spokeswoman, refused to comment.

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