Volkswagen bosses charged over emissions scandal

BERLIN • German prosecutors said yesterday that they have charged Volkswagen's chief executive and chairman as well as its former CEO with market manipulation in connection with the diesel emissions scandal that erupted in 2015.

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

That, they said in a statement, meant the executives had improperly influenced the company's share price.

The charges, which Volkswagen rejected, could require Mr Diess to spend significant time on his defence, distracting him at a crucial time for the company which is trying to move on from the scandal and is recasting its business to focus on new - cleaner - technologies like electric cars.

The prosecutors argued that Mr Winterkorn had been aware of the issue and the potential resulting damage since at least May 2015, Mr Poetsch since June 29 and Mr Diess since July 27.

Each of them should have ordered the release of an ad hoc statement for markets at that point, the prosecutors said.

The scandal broke only when the US authorities went public with it on Sept 18, 2015.

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 joined the company on July 1, 2015, shortly before the scandal broke and was initially head of its core Volkswagen brand.

Mr Winterkorn was succeeded as CEO by Mr Matthias Mueller, who was then replaced by Mr Diess in April last year.

Volkswagen swiftly rejected the charges, saying it had "meticulously investigated" the matter with the help of internal and external legal experts over nearly four years.

"The result is clear - the allegations are groundless," Ms Hiltrud Dorothea Werner, the board member responsible for integrity and legal affairs, said in a statement. She added that, if the indictment goes to trial, the company "is confident that the allegations will prove to be unfounded".

Mr Tido Park, a lawyer for Mr Diess, told German news agency dpa the indictment would not restrict Mr Diess from performing his duties as CEO.

Shares in the car giant dropped 2.4 per cent on the news.

Volkswagen admitted installing software in its diesel cars that turned on pollution controls when vehicles were being tested and switched them off during daily driving. That made it look as if the cars met tough US limits on harmful pollutants known as nitrogen oxides.

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A version of this article appeared in the print edition of The Straits Times on September 25, 2019, with the headline Volkswagen bosses charged over emissions scandal. Subscribe