US Senator Marco Rubio (R-FL) is leading a Congressional inquiry into investment fund MSCI’s decision to lift vehicle manufacturer Volkswagen’s ‘red flag’ rating.
MSCI had granted Volkswagen a ‘red flag’ rating after the latter was discovered to be harnessing Uyghur slave labor in its factory in Xinjiang.
Many have accused the Chinese Communist Party (CCP) of committing genocide against Uyghurs and other predominantly Muslim ethnic groups in Xinjiang via forced labor and other genocidial acts.
However, last December, following a controversial audit performed by VW on its Xinjiang factory, MSCI decided to remove VW’s ‘red flag’ rating.
VW sells millions of its cars in China.
Senator Rubio, alongside Senator Chris Coons (D-CT) and U.S. Representatives John Moolenaar (R-MI), and Raja Krishnamoorthi (D-IL) sent a letter to the Chairman and Chief Executive Officer of MSCI Henry Fernandez opposing the new classification.
According to the letter, the audit VW performed on its Xinjiang factory is questionable, as the firm who performed the audit themselves conceded.
The firm stated that the audit was affected by “well-known challenges…collecting data” in Xinjiang.
Additionally, the letter alleges VW has continued partnering with Chinese companies accused of using Uyghur slave labor to manufacture their products.
Rubio commented MSCI’s decision to upgrade VW’s poor rating is contradictory to the available evidence.
“MSCI made a terrible call by removing Volkswagen’s “red flag” rating, when the VW factory in Xinjiang is infamous for using Uyghur forced labor,” said Rubio.
The letter asks MSCI to disclose the reasoning behind the rating upgrade and if MSCI will reclassify VW with a “red flag” rating following continued reports of Uyghur forced labor in VW factories.
MSCI has until June 21 to respond.
