Volkswagen Fires Employee Who Pointed Out Financial Security Vulnerabilities

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 24th (local time) that Volkswagen fired an employee last year who warned about security vulnerabilities in its financial subsidiary Volkswagen Payment.

A senior Volkswagen employee informed management on September 11 last year that Volkswagen Payment was vulnerable to cybersecurity threats. The employee warned that Volkswagen Payment could be exposed to financial crime fraud and that $2.6 million deposited in accounts could be stolen. He also argued that if the vulnerability issue was not resolved, Volkswagen could be exposed to regulatory risks.

The day this employee raised the risk was right after the US bank JP Morgan Chase announced plans to acquire Volkswagen Payment. JP Morgan announced on September 8 last year that it would acquire a 75% stake in Volkswagen Payment.

Volkswagen stated that the whistleblower’s claims were found to be unfounded and that the employee was dismissed in October last year due to differences in working methods with the company.

The Volkswagen Payment in question is a financial services subsidiary established by Volkswagen in 2017. Its headquarters are in Luxembourg, and at the time of establishment, it was a wholly owned subsidiary of Volkswagen.

Volkswagen Payment provides payment services when purchasing cars using credit cards, PayPal, and other methods. Currently, deposits for pre-orders of Volkswagen electric vehicles can be paid through Volkswagen Payment. Volkswagen plans to extend Volkswagen Payment services to brands such as Audi, Porsche, and Scania in the future.

Volkswagen suffered a significant blow to its corporate credibility due to the 2015 diesel vehicle emissions manipulation scandal, known as 'Dieselgate.' After the Dieselgate incident, Volkswagen emphasized improving corporate culture. Employees were encouraged to point out concerns without fear of retaliation. The company appointed directors responsible only for legal compliance and integrity and established a system called 'Together4Integrity' to report wrongdoing.

There are criticisms that the personnel action taken against the employee who raised suspicions related to Volkswagen Payment in October last year contradicts this policy.