The U.S. government's auto safety regulator announced Tuesday it would award over $24 million to a former Hyundai employee who reported key information about safety defects.
Why it matters: Engineer Kim Gwang-ho provided evidence that Hyundai and sister company Kia were hiding a design flaw that was causing engines to seize and catch fire, according to law firm Constantine Cannon, which represents Kim.
It's the first time the U.S. regulator, the National Highway Traffic Safety Administration (NHTSA), has awarded a whistleblower.
Details: After Kim brought forth evidence in 2016, the NHTSA found that Hyundai and Kia delayed recalling over 1.6 million vehicles and gave regulators inaccurate information about the defects.
In November last year, Hyundai and Kia agreed to pay combined penalties of $210 million, $81 million of which went to the U.S. government.
Both companies also committed to "substantial organizational improvements," the NHTSA said.
Kim told the Wall Street Journal that Hyundai fired him shortly after he reported his concerns and filed a police complaint against him for allegedly leaking business secrets.
What they're saying: "Whistleblowers play a crucial role in bringing information to NHTSA about serious safety problems that are hidden from the agency," NHTSA Deputy Administrator Steven Cliff said in a statement.
"This information is critical to public safety and we are committed to rewarding those who bring information to us."
"I am pleased that I have been justly compensated for the risks I took to protect owners of these defective cars, and grateful that the U.S.’s legal system had a program in place to make this possible," Kim said in a statement.
"I hope my reporting leads to real safety improvements, both at Hyundai and throughout the industry."
"This is an important award — not just for Mr. Kim, but for the automotive industry as a whole," Constantine Cannon attorney Ari Yampolsky added. "It is another step in the internationalization of efforts to root out fraud and corruption."
The big picture: The NHTSA and the Transportation Department are preparing to propose rules for the automotive whistleblower program.
Under the program, which Congress established in 2015, whistleblowers are allowed up to 30% of any collected monetary sanctions that result from their reports.
Kim's $24 million award is the maximum percentage allowed by law, according to the NHTSA.
SOURCE : Axios
