FRANKFURT (Germany) • The investigation into emissions fraud at Volkswagen has reached the very top of the firm, with its supervisory board chairman Hans Dieter Poetsch being suspected by German prosecutors of violating securities laws, according to the carmaker.
Mr Poetsch, a former chief financial officer at Volkswagen, is accused of failing to notify shareholders quickly enough of the financial risks of the diesel emissions cheating scandal, which has already led to a US$15 billion (S$20.8 billion) settlement in the United States and caused the stock price to plunge.
The disclosure on Sunday that Mr Poetsch is the subject of an investigation is likely to intensify criticism that Volkswagen remains in the hands of many of the long-time insiders who were in charge while the firm was producing millions of cars deliberately designed to cheat at air-quality tests.
More than a year after the company was accused of wrongdoing, the scandal is still widening and the damage to the firm's finances and reputation continues to expand.
The investigation of Mr Poetsch could also provide ammunition to investor groups and mutual funds that are suing Volkswagen in the US and Germany. The lawsuits claim that Volkswagen managers were aware of the impending scandal and failed to notify shareholders as required by law.
A confidant of the Porsche and Piech families, who own a majority of Volkswagen's voting shares, Mr Poetsch was elevated to chairman of the supervisory board in October last year. That was a few weeks after the Environmental Protection Agency accused the carmaker of manipulating engine software to conceal illegally high levels of nitrogen oxide emissions.
Mr Poetsch had been chief financial officer of Volkswagen since 2003 and a member of its management board. As chairman of the supervisory board, he oversees the management board.
In a statement, Volkswagen said its management board "duly fulfilled its disclosure obligation under German capital markets law".
Volkswagen is also under investigation in the US, not only for programming cars to cheat, but also for an elaborate cover-up starting in early 2014 after tests first cast doubt on what the firm claimed were "clean diesel" cars. In fact, the Volkswagen cars emitted as much as 40 times the permitted levels of nitrogen oxides, a family of gases that can cause health problems including asthma and cancer.
The cover-up, which lasted more than a year, ultimately raised the cost of the scandal and the company has not been able to take advantage of lower financial penalties normally available to corporate wrongdoers who are forthcoming with information.