GERMAN PROSECUTORS RAID HYUNDAI & KIA

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German prosecutors have raided the local offices of Hyundai Motor and Kia.They are investigating the allegation that the automakers installed illegal emissions-defeating devices in their diesel vehicles.

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Prosecutors in Frankfurt, Germany, raided eight offices of Hyundai and Kia Motors in Germany and Luxembourg on Tuesday local time. They cooperated with the European Union agency Eurojust to deploy some 140 police officers and investigators from Hessen and other regions, according to Bloomberg News. Sources say Hyundai, Kia and the local manufacturers of their components allegedly sold more than 210,000 diesel cars equipped with illegal emissions-defeating devices as of 2020. The devices help emit lower levels of CO2 emissions during testing as opposed to when the car is actually being operated. The prosecutors are looking into whether Hyundai and Kia committed the same fraud as German automakers like Volkswagen did during the so-called "Diesel Gate" in 2015 - the massive emissions scandal. Hyundai and Kia said they will faithfully undergo the probe and comply with the investigations. Hyundai Motor's shares subsequently plummeted 5.6 percent on Wednesday while Kia's shares nosedived more than 6 percent.

[Soundbite] Lim Eun-young(Samsung Securities) : "Investors seem to have lost confidence. They reacted quite sensitively."

Since the emissions scandal, German prosecutors have investigated foreign automakers with a presence in Germany. They include Japan's Suzuki, which was investigated back in April.

[Soundbite] Prof. Lee Ho-keun(Daeduk Univ. Department of Automotive Engineering) : "The prevailing opinion in Germany is that any automaker can just as easily manipulate. Even their own automakers cheated with emissions devices despite being the world's best."

If the charges against Hyundai and Kia are proved, the two automakers might have to recall their products en masse and pay an astronomical amount of compensation.