Scrutiny on former VW CEO in emissions-fraud case

GERMAN prosecutors said for the first time on Friday that they had evidence that Volkswagen’s former chief executive officer actively took part in the company’s emissions fraud, significantly raising the stakes for the carmaker and undercutting i t s attempts to put the scandal behind it once and for all.

Martin Winterkorn, who resigned as chief executive officer in September 2015 after the emissions cheating came to light, is under investigation for fraud and false advertising, according to prosecutors in Braunschweig, Germany. The authorities also increased the number of people under investigation and portrayed a far more extensive conspiracy than before.

Winterkorn and Hans Dieter Poetsch, theVolkswagen supervisory board chairman, were already under investigation for violations of securities laws. But the new fraud allegations suggest that prosecutors suspect Win- terkorn had a more active role than he or the company have acknowledged.

The new allegations also point to a larger number of conspirators, and they further undermine Volkswagen’s attempts to portray the fraud, in which its diesel vehicles emitted lower levels of pollutants in lab testing than in the real world, as the work of executives and engineers below the level of its board. The assertions leave the automaker even more vulnerable to lawsuits by shareholders in the US and Europe, who are seek- ing billions of dollars in damages.

Prosecutors said in a statement that the number of people officially under investigation had risen to 37 from 21, after police searches of dozens of homes and offices in and around Wolfsburg, Germany where Volkswagen has its headquarters.

The latest developments signal that Volkswagen is far from able to move beyond a scandal that has contributed to a loss of market share in Europe and to slumping sales in the United States.

This month, Volkswagen pleaded guilty to violations of the Clean Air Act in a settlement with the United States government that also includes a $4.3 billion fine. In a detailed admission of wrongdoing, Volkswagen avoided implicating any members of the management board.

But investigators in Braunschweig said in a statement on Friday that there was evidence that Winterkorn “could have known of the manipulated software and its effect sooner than he has maintained”.