Wednesday 16 October 2019

Three VW bosses charged with market manipulation

Prosecutors say trio influenced share price after emissions scandal

Photo: PA
Photo: PA

By Geir Moulson and David McHugh

German prosecutors have charged three Volkswagen executives with market manipulation in connection with the diesel emissions scandal that erupted in 2015.

The three men – chief executive Herbert Diess, chairman Hans Dieter Poetsch and former CEO Martin Winterkorn – are accused of deliberately informing markets too late about the costs to the company that would result from the scandal, prosecutors in the city of Braunschweig said.

That meant the executives had improperly influenced the company’s share price, they said.

Mr Winterkorn resigned shortly after the scandal became public.

Mr Poetsch was chief financial officer at the time and became chairman of the supervisory board in late 2015.

Mr Diess arrived at the company shortly before the scandal broke and was initially the head of its core Volkswagen brand.

Mr Winterkorn was succeeded as CEO by Matthias Mueller, whom Mr Diess replaced in April 2018.

The charges raise the prospect that Mr Diess may have to spend significant time on his defence at a time when the company is facing a challenging transition towards electric vehicle production and providing services such as car sharing through smartphone apps.

Volkswagen later rejected the charges as “groundless”.

Hiltrud Dorothea Werner, the board member responsible for integrity and legal affairs, said VW had “meticulously investigated” the matter with the help of internal and external legal experts over nearly four years.

She said in a statement that if the indictment goes to trial, the company is “confident that the allegations will prove to be unfounded”.

Volkswagen admitted installing software in its diesel cars that turned on pollution controls when vehicles were being tested and switched them off during everyday driving.

That made it look as if the cars met tough US limits on harmful pollutants known as nitrogen oxides.

Eleven million cars worldwide were equipped with the illegal software.

The diesel scandal has cost Volkswagen more than €30bn in fines, recall costs and civil settlements.

The firm apologised and pleaded guilty to criminal charges in the US, where two executives were sentenced to prison and six others charged, although they could not be extradited.

In a separate case, prosecutors in April charged Mr Winterkorn and four others with fraud in the emissions cheating scandal, which has helped turn many Europeans against diesel engines and accelerated the push towards electric cars.

Prosecutors alleged that Mr Winterkorn knew about the scheme since at least May 2014 and failed to put a stop to it. That contradicted his claim that he did not learn about it until shortly before US investigators announced it in September 2015.

Associated Press

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