Babboe: Public prosecutor opens criminal investigation against cargo bike manufacturer

Highlights: Babboe: Public prosecutor opens criminal investigation against cargo bike manufacturer. Babboe confirms on its Dutch website that "a criminal investigation has been launched into BabboE's actions in recent years" The manufacturer will work actively and transparently with the authorities. There are probably tens of thousands more to come in Germany and the Netherlands. Costs probably in the range of 150 million euros, according to an Accell insider. The recall is expected to cost the group up to 150 million euro.

The Babboe case develops into a criminal case. The cargo bike manufacturer is said to have misled authorities about safety risks for years. The public prosecutor's office is investigating. The recall in Germany is being expanded.

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Children are particularly at risk in an accident:

The cargo bike manufacturer Babboe has already recalled several models due to safety risks

Photo: Babboe

The cargo bike subsidiary Babboe of the Dutch bicycle company Accell could become a case for prosecutors. It is now known that the Consumer Goods Safety Authority (NVWA) has launched a criminal investigation against Babboe together with the public prosecutor's office. Apparently the company has misled the Dutch authorities for years about how big the problem and safety risk of defective cargo bike frames really is.

The investigators are apparently also relying on new incriminating material. Numerous photos, documents and audio recordings available to the broadcaster “RTL Nieuws” could substantiate the allegations. In the audio recordings, for example, employees report, among other things, how they “dragged away” defective frames and hid them “in containers or buses” before the officers arrived.

Babboe confirms on its Dutch website that "a criminal investigation has been launched into Babboe's actions in recent years." The manufacturer will work actively and transparently with the authorities. “This is in line with the values we stand for.” If the reports about possible deception of NVWA employees turn out to be true, Babboe will firmly reject this and distance himself from it.

Further callbacks possible

In a documented statement from Accell to the broadcaster, the parent company emphasized that an internal investigation had already been initiated after the allegations became known in February. “We believe it is important that signals from employees and customers are taken seriously and lead to appropriate action. This should have been done faster and better in the past,” admits Accell, adding to Babboe’s statement. They are in contact with the NVWA and are “working intensively on organizing a recall”. Accell leaves it open whether other models will be affected beyond the first four known models.

A detailed query from manager magazin to Accell about the allegations initially remained unanswered.

“Really shocking”

A spokesman for the NVWA told “RTL Nieuws” that he was extremely angry about Babboe's behavior with regard to the possible hiding of defective frames. This is “really shocking and downright disgusting,” the station quoted spokesman Björn Esebrock as saying. According to the authority, “people's safety was seriously compromised”. A criminal investigation is now underway. The investigation would be carried out by the NVWA's own service - the Intelligence and Investigation Service (IOD) - and the public prosecutor's office.

RTL Nieuws had already reported on grievances at the cargo bike manufacturer on February 9th based on interviews with five employees. Shortly afterwards, the parent company Accell replaced the responsible managing director,

Pippa Wibberley,

with

Gerard Feenema

. At the same time, the Dutch authorities stopped the sale of all Babboe cargo bikes due to the threat of frame breakage and initially ordered the recall of four models. The NVWA announced at the time that it was investigating criminal investigations.

Recall expanded in Germany

At the end of February, the Federal Institute for Occupational Safety and Health (BAuA), which is responsible in Germany, classified most of Babboe's cargo bikes as "dangerous products in Germany" due to the extensive product recall by the Dutch NVWA. At the beginning of March, Babboe recalled the City, City-E, Mini and Mini-E models in Germany. In the Netherlands, the manufacturer wanted to have the affected models picked up from its customers' homes.

According to a letter to dealers available to “Velobiz” magazine, Babboe is also recalling the “City Mountain” model in Germany, which was produced before 2020. Babboe also recommends that customers of numerous other models take their cargo bike to a dealer for a free inspection. A corresponding checklist will be sent to Babboe specialist dealers after the Easter holidays.

Costs probably in the three-digit million range

According to earlier information from an Accell spokeswoman, Babboe has recalled a total of around 15,000 cargo bikes in its two most important markets of the Netherlands and Germany alone. There are probably tens of thousands more to come. Babboe sells its cargo bikes in 30 countries worldwide. The cost of the recall in its central markets alone could cost the group up to 150 million euros, the “Financieele Dagblad” recently reported, citing insider estimates.

Accell has more than a dozen bicycle brands under its umbrella and was taken off the stock exchange by the US investment company KKR in 2022 for around $1.56 billion. Accell is heavily in debt. Analysts consider its capital structure to be “unsustainable.” After its takeover by KKR, the group quickly filled leading management positions several times, and lenders now fear for their money.

Whistleblower should apparently be terminated

The toughness with which Babboe is acting in the case is also shown by the fact that it tried to terminate a mechanic who had been working for the manufacturer for over 12 years in December 2023 - a good two months before the NVWA made its decision to temporarily suspend sales issued. This is reported by the “NL Times”, citing documents from the responsible district court in Amersfoort. However, according to the March 5 ruling, Babboe was required to withdraw the termination notice and reimburse the employee's legal fees and court costs.

According to the report, the 47-year-old mechanic contacted the Dutch whistleblower authority in September 2023 after his repeated reports about sometimes “life-threatening” safety problems with cargo bikes were apparently ignored within the company. The company did nothing to address the problems described. “On the contrary, he was silenced and portrayed as a difficult employee,” the “NL Times” quoted his lawyer as saying.

KKR and creditors apparently want to continue supporting Accell

None of the interviewees that manager magazin has so far interviewed about the Babboe case can remember a mass bicycle recall, as is now underway in the Netherlands and Germany and is likely to occur in many other European countries. “This is unique to this extent,” said an industry expert who did not want to be named. “If they really have to replace all the bikes, then the manufacturer could face financial catastrophe.”

Accell recently told manager magazin that the group was supporting its cargo bike subsidiary financially and organizationally. According to another report from the "Financieele Dagblad" a few days ago, the parent company itself had secured further financial support from its owners and creditors in order to cover the costs of defective Babboe wheels. The purchasing manager of the bicycle company wrote this in a letter to concerned suppliers, without giving any details.