BMW

BMW Fined $18 Million for Inflating Sales Figures

The authorities caught BMW inflating sales figures to lure investors. Obviously, the Bavarian carmaker now needs to pay a fine.

BMW has pulled off quite a Wolf of Wall Street move very recently. Namely, they cooked books to look palatable. However, the Security Exchange Commission (SEC) found out, and the Bavarian carmaker was fined $18 Million. But why or how did they do it?

It is textbook stuff, actually. The minute you start inflating figures in your books of account, you catch the attention of new investors. This invites them to raise capital in the form of bond offerings. To finesse the crime, BMW got approvals from credit rating agencies. That way, they make the figures look even more credible. Quite the collaboration, right?

But to commit one crime, you will have to commit many more — lying, for instance. Inevitably you cannot coordinate all of them, and you stumble and get caught.

Stephanie Avakian, the Director of the Division of Enforcement in the SEC, made a few interesting observations. Namely, BMW reported false US sales numbers along with enhanced consumer demand information. But these are some things you cannot hide from the legal authorities year after year. Moreover, they fed all this data to prospective stakeholders and lured them into making fresh investments.

You see, when you fail to disclose certain vital aspects for a long time, things start to get a bit suspicious, especially when you try to do it for almost two years (from 2015 to 2017).

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But isn’t it impossible to get away after being scrutinized? This case bears testimony to that fact. Let’s say you report the sale of 10,000 units, whereas the real figure is somewhere between 8,000. Then, the company can put the excess into a reserve. In the future, they could use it for any future contingencies or troubles.

On paper, they exist. But in reality, they don’t. It’s like a magic trick—something which will easily evade the public eye.

To add on to the nuisance, they even paid off dealers to falsely display “sold” cars in the showrooms. Quite the eye-wash, really. Just to get rid of the clutter or circumstantial evidence.

On the one hand, auto-companies like Fiat-Chrysler (last year) and BMW are getting fined by the US government. But on the other hand, companies like Tesla, Volvo, Ford, and many more are suing the government. 2020 is 2020 all over again.

Source: CarScoops

About Rebanto Roy

Rebanto Roy
Rebanto Roy is a 21-year-old Master's student whose sole objective is to make a difference with his creative writing abilities. He has been a Content Writer for only a crisp three years within which he has contributed to industries ranging from Hospitality to Human Resources. He has the remarkable capability of transforming a single word into a stream of opinions, facts, figures, and of course, a salty yet direct sense of humor. He is very passionate about music and hopes that one day he will be working as a noteworthy copywriter in a radio station. Hobbies range from playing football to strumming the guitar once in a while.

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