A whistleblower has been awarded more than $24 million for reporting a design flaw of a South Korean carmaker to the U.S. auto safety regulator.
The U.S. National Highway Traffic Safety Administration (NHTSA) handed the sum to former Hyundai Motor engineer Kim Gwang-ho, who provided vital information about safety lapses at the carmaker, the agency announced in a statement on Tuesday, Nov. 9.
According to law firm Constantine Cannon, which represents Gwang-ho, Reuters reported that the award is the world’s biggest ever in a whistleblower case in the auto sector.
“This award is the maximum percentage allowed by law … and is the first award NHTSA has issued under its authority,” the NHTSA said.
“Whistleblowers play a crucial role in bringing information to NHTSA about serious safety problems that are hidden from the agency,” the NHTSA’s deputy administrator Steven Cliff said.
The NHTSA said that Gwang-ho provided the agency with information related to Hyundai and Kia’s violations of the Safety Act.
In 2016, the former Hyundai Motor employee reported to the NHTSA that Hyundai had failed to fix a design flaw in its Theta II engines, which were prone to seizing up and even catching fire.
In November 2020, the NHTSA issued Consent Orders with Hyundai and Kia, reflecting the agency’s assessment that Hyundai and Kia conducted untimely recalls of over 1.6 million vehicles equipped with Theta II, and inaccurately reported crucial information to NHTSA about the nature of serious defects in the engines.
The combined penalties in the Consent Orders amounted to $210 million, $81 million of which was paid in cash to the U.S. government.
By statute, the NHTSA awards a maximum of 30% of the collected monies to the whistleblower.
The NHTSA said its action recognizes the essential role whistleblowers can play in enhancing the safety of the nation’s roadways.
The agency said it welcomes information from whistleblowers on a wide variety of topics, including potential vehicle safety defects, noncompliance with the Federal Motor Vehicle Safety Standards, and violations of the Vehicle Safety Act.