• Sunday, May 26, 2024
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German prosecutors charge former Volkswagen chief with fraud


German prosecutors have charged former Volkswagen chief executive Martin Winterkorn and four other people with fraud for their alleged role in the decade-long diesel scandal.

The indictment from prosecutors based in Braunschweig, near VW’s Wolfsburg headquarters, marks the first time a VW board member has been charged in Germany. Former Audi CEO Rupert Stadler was arrested by Munich prosecutors last year, but he was never charged and later released.

The US Environmental Protection Agency first exposed the cheating in September 2015, when it laid out how VW had designed and then covered-up the use of illegal “defeat devices” from 2006 to 2015. Mr Winterkorn stepped down within days, saying: “I am shocked by the events of the past few days.”

Prosecutor Klaus Ziehe told the German press agency that the district court had received the indictment on Friday. Mr Winterkorn’s lawyer, Felix Dörr, could not be reached for immediate comment but Volkswagen has previously strenuously denied any involvement from senior figures in connection to the scandal.

Volkswagen plead guilty to three criminal counts in March 2017. The scandal has cost the carmaker around $30bn so far, including penalties and car repurchases.

It is still defending itself in multiple jurisdictions. Compliance chief Hiltrud Werner told the FT last December that 2019 would be “most difficult year ever” in terms of legal complexity, as dozens of Volkswagen engineers are expected to go to trial for the first time. At the time prosecutors in Braunschweig and Munich collectively had about 70 current and former employees under suspicion.

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Mr Winterkorn was charged with alleged conspiracy and wire fraud by US prosecutors in May 2018. This action has not proceeded due to jurisdictional issues. Just last month the US Securities and Exchange Commission sued Volkswagen and Mr Winterkorn, alleging investors had been defrauded; claims which are being contested.

According to a legal document from last year which lays out Volkswagen’s defence, top managers at the German carmakers had been blindsided by the revelations of cheating and a cover-up, which until then had been considered a small issue concerning emissions regularities.

The document said Mr Winterkorn participated in day-long meetings on Sept 19-20 2015, asking engineers for an account of what had happened.

“When this account had ended and he had realised the entire dimensions of the problem,” the filing says, “he addressed one of the VW engineers who was involved by name and asked him verbatim, ‘Man, why didn’t you tell me all that?’”

Volkswagen declined to comment on the charges against Mr Winterkorn, describing the charges as a private matter.