VW could face fur­ther fines from Ger­man au­thor­i­ties

The Gulf Today - Business - - FRONT PAGE -

BRAUN­SCHWEIG: Volk­swa­gen could face ad­di­tional fines in Mu­nich and Stuttgart on top of the 1 bil­lion eu­ros ($1.2 bil­lion) it has been told to pay for man­age­ment lapses which caused emis­sions cheat­ing on 11 mil­lion VW diesel cars.

Pros­e­cu­tors in the Ger­man town of Braun­schweig used a so­called ad­min­is­tra­tive or­der to fine Volk­swa­gen for over­sight prob­lems which al­lowed mil­lions of pol­lut­ing VW cars to hit the road.

The fine is one of the big­gest ever penal­ties im­posed by Ger­man au­thor­i­ties against a com­pany.

It deals yet another blow to one of Ger­many’s big in­dus­tries which is strug­gling to re­cover from the fall­out from the emis­sions cheat­ing scan­dal that broke in Sept. 2015.

The 1 bil­lion euro fine is not in­cluded in the 25.8 bil­lion eu­ros ($30 bil­lion) that Eu­rope’s big­gest car­maker has set aside to cover costs re­lated to its ad­mis­sion that it cheated US diesel emis­sions tests, and it will hit earn­ings, an­a­lysts at Ever­core ISI said.

But share­hold­ers should wel­come the move since it marks an end to some of the crim­i­nal pro­ceed­ings against the car­maker, they added.

How­ever, that is not the end of VW’S le­gal prob­lems.

Pros­e­cu­tors in the south­ern city of Mu­nich said they too are examining whether to im­pose sim­i­lar fines on VW’S pre­mium di­vi­sion Audi, for its role manipulating 6 and 8 cylin­der diesel en­gines.

That would be in ad­di­tion to Braun­schweig’s fine which sanc­tioned vi­o­la­tions tied to 4-cylin­der diesel en­gines.

Stuttgart pros­e­cu­tors, who have launched a probe against em­ploy­ees at Daim­ler, Porsche, which is another part of the Volk­swagwn group, and auto sup­plier Bosch said they too may con­sider the use of an ad­min­is­tra­tive or­der.

“In all these pro­ceed­ings it is pos­si­ble that a reg­u­la­tory of­fence pro­ce­dure will be car­ried out, we are still eval­u­at­ing this pos­si­bil­ity,” a spokesman for the Stuttgart pros­e­cu­tor’s of­fice said on Thurs­day.

Pros­e­cu­tors in Braun­schweig are also in­ves­ti­gat­ing Volk­swa­gen ex­ec­u­tives in­clud­ing chair­man Hans Di­eter Poetsch and chief ex­ec­u­tive Her­bert Diess to see if they in­formed in­vestors in a timely fash­ion about the scale of po­ten­tial fines faced by the car­maker for cheat­ing US emis­sions tests.

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