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FCA fined US$40 million for over-inflating sales figures

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FCA fined US$40 million for over-inflating sales figures

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The US Securities and Exchange Commission (SEC) slapped automaker Fiat Chrysler Automobiles (FCA) with a US$40 million (RM168 million) fine last week for a number of fraudulent offences, including falsely reporting its new vehicle sales to mislead investors about its monthly sales figures, Reuters reports.

The commission said that FCA’s US unit also falsely touted a streak of uninterrupted monthly year-over-year sales growth from 2012 to 2016, when that streak had actually ended in September 2013. This was done to make it look like the company was performing better than it was.

In a statement, the SEC said that as a result of the automaker putting pressure on its business centres, some employees at most of the business centres began engaging in faking sales performance reports, masking these in a company database using “cooperative marketing funds” to disguise the payments. The commission said the database contained fake vehicle sales entries, utilising false customer names and dates of sales.

The company also maintained a database of actual but unreported sales, dubbed internally as a “cookie jar” or the “bank.” In months when the growth streak would have ended or when the company fell short of other targets, it would utilise numbers from the database and report old sales as if they had just occurred.

In an official statement, FCA said it had cooperated fully in the process to resolve the matter. “The company has reviewed and refined its policies and procedures and is committed to maintaining strong controls regarding its sales reporting,” it said.

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