German prosecutors charge VW bosses with ‘dieselgate’ market manipulation

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Volkswagen CEO Herbert Diess, right, and chairman Hans Dieter Poetsch address the media at the VW plant in Wolfsburg, Germany, in April. Photo: Fabian Bimmer/Reuters

The fallout from the diesel scandal just won’t end for German carmaker Volkswagen.

On Tuesday, the state prosecutor in Braunschweig brought criminal charges of market manipulation against current VW chairman Hans Dieter Poetsch, chief executive Herbert Diess, and former CEO Martin Winterkorn.

The managers are charged with not informing investors in good time ahead of the news of the company’s diesel-emissions cheating breaking in September 2015.

The US Environmental Protection Agency published its findings that the German carmaker had fitted millions of cars with special software to falsify emissions readings in test situations on 18 September 2015. VW only informed the financial markets several days later, on 22 September, when its shares were tanking. Winterkorn resigned not long after the scandal broke.

In a statement, VW board member for legal Hiltrud Werner said that the company “has meticulously investigated this matter with the help of internal and external legal experts for almost four years. The result is clear: the allegations are groundless.”

VW has already paid €30bn (£26bn, $33bn) in fines, damages, and other charges related to the scandal since 2015. It is still facing several lawsuits all over the world, including one brought by shareholders in Germany last year, seeking €9bn in damages.

Last week, VW agreed to pay AU$127m to thousands of Australian consumers; the settlement is pending approval by the Australian courts.

The Braunschweig court must now review today’s charges and decide if it will bring the managers to trial.