German prosecutors extend ‘dieselgate’ probe to VW chairman

November 6, 2016
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Hans-Dieter Poetsch, supervisory board chairman of German carmaker Volkswagen, pictured in 2015
Hans-Dieter Poetsch, supervisory board chairman of German carmaker Volkswagen, pictured in 2015

, FRANKFURT, Germany Nov 6 – German prosecutors probing whether Volkswagen executives manipulated the markets in the wake of the “dieselgate” scandal have widened their investigation to include the chairman of the group’s supervisory board, the auto giant said Sunday.

“The proceedings refer to the period during which (chairman) Hans Dieter Poetsch served as the group chief financial officer,” VW said in a statement.

The announcement is a fresh blow to VW’s efforts to move on from the worst crisis in its history, which erupted in September last year after the group admitted to installing software in 11 million diesel engines worldwide that could dupe emissions tests to make the cars seem less polluting than they were.

Prosecutors in the German city of Brunswick are already investigating former CEO Martin Winterkorn and another former board member for allegedly holding back information from investors in the days after the scandal erupted.

By law, listed companies are required to disclose information that could affect market prices immediately.

Volkswagen investors have so far filed 1,400 claims seeking a total of 8.2 billion euros ($9.1 billion) in damages over the emissions cheating saga, a court in Brunswick, close to VW’s Wolfsburg headquarters, said in September.

The carmaker said it would stand by Poetsch, who was VW finance chief for over a decade before he was named board chairman in a reshuffle shortly after the crisis broke.

“Based on careful examination by internal and external legal experts, the company reaffirms its belief that the Volkswagen board of management duly fulfilled its disclosure obligation under German capital markets law,” VW said.

Trouble at Audi 

More than a year since the “dieselgate” scandal rocked the industry, VW continues to be mired in legal and financial woes.

However, the group last month won approval for a massive $14.7-billion settlement in the United States that includes compensation for nearly half a million owners of the polluting vehicles.

But the company still faces criminal allegations over the cheating in the US, as well as a string of other legal cases including myriad lawsuits in Europe.

VW says it has so far set aside 18 billion euros to pay for legal costs and the refits and buy-backs of affected vehicles, but experts believe the final bill will be far higher.

In another potential headache for the group, Germany’s Bild am Sonntag newspaper reported at the weekend that US regulators had found evidence of another software manipulation scheme at VW’s luxury subsidiary Audi.

According to Bild, which did not cite its sources, certain Audi models with automatic transmissions were equipped with software that could detect when the cars were undergoing testing and lower their carbon dioxide emissions accordingly.

Audi ended its use of the software in May, Bild added.

Audi representatives were not immediately available for comment.

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