Seoul Court Mulls Arrest Warrant for RSM CEO

A Seoul court is considering issuing an arrest warrant for Renault Samsung Motors CEO Park Dong-hoon as part of an investigation into the Volkswagen Dieselgate scandal.

The action by the Seoul Central Prosecutor’s Office to seek the warrant comes at a critical time for RSM, as Park and his management team are deeply involved in labor negotiations that began in mid-July and are trying to reach a strike-free collective bargaining agreement with the automaker’s workers union.

Park also is personally directing the run-up for the launch of the new QM6 CUV, expected to give RSM a huge sales boost when it hits the market in September.

The prosecutors want Park arrested for his role as CEO of VW Korea during the period when the automaker was falsifying its emissions testing, as well as for alleged obstruction of justice that occurred when he was questioned on the matter earlier this month.

Park took his post as CEO of RSM on April 1, when former RSM CEO Francois Provost was elevated to Renault’s senior vice president-China operations and president of the Dongfeng Renault Automobile JV in China. Park joined RSM as executive vice president-marketing and sales in May 2013, after serving as CEO of VW Korea since 2005.

The arrest warrant charges Park with violating Korea’s Clean Air Conservation Act, fabricating documents pertaining to emissions and other certification testing, as well as obstructing justice.

The court heard the prosecutor’s plea for the arrest warrant on Friday but apparently has taken the application under advisement and will make a final decision next week. Analysts believe that in addition to the merits of the prosecutor’s application and plea, the court is considering the possible severe economic impact on the company and on the Busan region if Park should be arrested.

Spokesmen for the prosecutor’s office have said publicly that willful violation of the Clean Air Conservation Act is a serious crime, far exceeding what could be considered an administrative matter.

“We can provide no information as the matter is processing now,” a spokesman for RSM tells WardsAuto. “Everything is OK,” he adds when asked whether there has been any impact on operations.

A spokesperson for Renault Asia Pacific operations in Wan Chai, Hong Kong, tells WardsAuto, “At this point it is too soon to comment. We are operating the business as usual.”

Neither spokesperson would comment on media reports in Korea that allege Renault is considering replacing Park in his post, should he be arrested.

Prosecutors allege Park marketed certain VW vehicles in Korea during 2011-2013 even though he had knowledge the vehicles were equipped with rigged software that lowered their emissions results.

They allege more than 120,000 vehicles equipped with EA189 diesel engines with software rigged to cheat on Euro 5 emission standards were sold during Park’s tenure at Audi VW Korea.

The prosecutors also claim he was involved in falsifying emissions and NVH test documents used to obtain environmental certification for the vehicles during the overarching 2010-2015 period.

Prosecutors have presented the court with evidence of emails and other documents seized during three headquarters raids that allegedly show Park was involved in the rigged-testing scheme.

In two interrogation sessions with prosecutors earlier this month, Park maintained he had no knowledge of the emission rigging. He said he also had no involvement with certification testing of any technical matters related to the vehicles.

Park has been extremely popular in Korea during his career as a senior automotive industry executive and at one time served as president of the Korea Automobile Importers and Distributors Assn. that represents 14 major vehicle importers.

Considered by some analysts as a marketing genius, he is credited with giving RSM a huge 26% surge in sales in the first half of 2016. Of the total 46,916 vehicles sold globally, 27,211 were of the SM6 sedan, the Korean modified and badged version of the new Renault Talisman. Park had set the annual sales goal for the new model at 50,000 units.