VW bosses to be charged over diesel cheating

German prosecutors are pressing criminal charges against the current CEO, chair and a former CEO of Volkswagen, saying they intentionally delayed telling investors about the carmaker’s cheating of US diesel emissions tests.

Prosecutors in the city of Braunschweig said on Tuesday they aim to charge Volkswagen CEO Herbert Diess, chair Hans Dieter Poetsch and former CEO Martin Winterkorn with stock market manipulation.

Four years after the German company admitted using illegal software to cheat US diesel engine tests, the charges show it is still struggling to move on from a scandal that has cost it more than $30bn in vehicle refits, fines and provisions.

Court proceedings are under way over that admission in September 2015. The indictment from the prosecutors in Braunschweig — in Volkswagen’s home region of Lower Saxony — is part of a separate legal push to try managers over allegations that they had delayed disclosing the scandal to investors.

Lawyers for the three accused said they would contest the charges, while Volkswagen said its supervisory board would meet immediately to discuss the indictments, which, if accepted by a Braunschweig state court, will lead to a trial date being set.

Volkswagen’s shares were down 2.16% at €153.20 late in the afternoon on Tuesday after going as low as €152.

Diess’s lawyer said the indictment would not hinder him in his role as CEO, adding that as Diess did not join Volkswagen until July 2015 he could not have foreseen that the scandal would have such a huge effect on the company.

Volkswagen shares lost up to 37% in value in the days after the scandal broke. Had investors known about the emissions test cheating, they might have sold shares earlier or not made purchases, plaintiffs have argued.

Volkswagen and its executives have said that the fallout from the scandal was not foreseeable and that they had expected to reach a settlement with US authorities before the disclosure of the test cheating.

HAD INVESTORS KNOWN ABOUT THE TEST CHEATING, THEY MIGHT HAVE SOLD SHARES EARLIER OR NOT MADE PURCHASES

The Braunschweig prosecutors said the accused should have kept investors informed.

“They pursued a strategy to achieve a settlement with the US authorities without disclosing all relevant information,” they said in a statement.

Winterkorn resigned in the days after the scandal broke, having been CEO for eight years. He told German legislators in early 2017 that he had not found out about the cheating any earlier than VW had officially admitted.

Poetsch became a management board member at Volkswagen in 2004 and was made chair in 2015.