Volkswagen CEO faces first probe over ‘Dieselgate’

May 17, 2017
Shares
Volkswagen CEO Matthias Mueller and others accused of market manipulation in the wake of the carmaker’s ‘dieselgate’ scandal/AFP-File

, FRANKFURT AM MAIN, Germany, May 17 – Volkswagen chief executive Matthias Mueller on Wednesday stood in the focus of an investigation into the world’s largest carmaker’s ‘dieselgate’ scandal for the first time, along with other key players at the firm.

Mueller and others “… are suspected of knowingly delaying telling shareholders about the financial consequences for Porsche SE of software manipulation in diesel vehicles by Volkswagen AG,” prosecutors in southwestern city Stuttgart said in a statement.

Overview
  • VW admitted in September 2015 to using so-called "defeat device" software to cheat regulatory nitrogen oxides emissions tests in some 11 million cars worldwide, pitching the world's largest carmaker into the deepest crisis in its history.
  • The revelations sent the group's shares plummeting by 40 percent in two days.

 

Porsche SE, separate from VW subsidiary Porsche AG, is a holding company with a majority stake in Volkswagen, and is itself owned by the descendants of renowned VW Beetle inventor Ferdinand Porsche.

VW admitted in September 2015 to using so-called “defeat device” software to cheat regulatory nitrogen oxides emissions tests in some 11 million cars worldwide, pitching the world’s largest carmaker into the deepest crisis in its history.

The revelations sent the group’s shares plummeting by 40 percent in two days.

Along with Mueller, former VW CEO Martin Winterkorn and Porsche SE chairman Hans-Dieter Poetsch are also suspected of failing to share information with investors in their roles as Porsche SE board members, prosecutors said.

As chief executive of Porsche AG until 2015, when he took over from Winterkorn as Volkswagen chief, Mueller was not caught up in probes into those who sat on the parent company’s board up until the scandal broke.

But he did sit on the Porsche SE board before the revelations, making him a target for the present allegations.

“Porsche SE sees the accusations raised as unfounded. It believes that it has always fulfilled its duties of publication under capital markets law in an orderly fashion,” the firm countered in a statement Wednesday.

A Volkswagen spokesman refused to comment on the prosecutors’ statement when contacted by AFP.

Litany of legal woes

Investigators opened the latest dossier in February, in response to charges levelled by German financial supervisor BaFin in summer 2016.

While it is the first time Mueller has been targeted by prosecutors over market manipulation, Winterkorn, Poetsch — a former chief financial officer and present supervisory board chief at VW — and VW brand chief Herbert Diess were already in the sights of a separate investigation for market manipulation in their VW roles.

Winterkorn has always insisted that he knew nothing about the diesel cheating, but stepped down following the firm’s admission that it had taken place.

Volkswagen faces an array of legal challenges in Germany and worldwide relating to its cheating software, installed mainly in own-brand vehicles but also in cars made by Audi, Skoda and Seat, among its stable of 12 brands.

Shareholders and car buyers have launched suits seeking compensation, while prosecutors in Brunswick, north Germany, are investigating 37 individuals at the company for fraud.

Others face probes over incorrect carbon dioxide emissions data.

The gigantic carmaker has so far set aside more than 22 billion euros ($24.4 billion) to cover fines and compensation related to the “dieselgate” affair, but experts estimate the final bill could be much higher.

In response to outrage over the scandal, VW earlier this year announced a massive shift in focus towards electric cars over the coming years that will see it shed 30,000 jobs by 2020.

Even that move has been overshadowed by clouds of suspicion, with Brunswick prosecutors last week announcing a corruption probe into the head of VW’s powerful works council, which gave its blessing to the cut in workforce numbers.

Volkswagen shares had lost 1.0 percent in Frankfurt trading to reach 141.95 euros ($157.50) by 1025 GMT, while the main DAX 30 index was down around 0.4 percent.

Shares

Latest Articles

Stock Market

Most Viewed