Volkswagen Dieselgate Archive

  • Volkswagen to receive RM1.44 billion in Dieselgate settlement payouts from insurers, former executives

    In the latest development concerning the Dieselgate emissions testing scandal that has plagued the Volkswagen Group, the German automaker has reached an agreement with its former executives for settlements totalling 287.8 million euros (RM1.44 billion), including 270 million euros (RM1.35 billion) from its directors’ and officers’ (D&O) insurers, the automaker group said in a statement.

    The payments relate to the emissions scandal investigation that began in October 2015 into the causes and persons responsible, which saw the automaker’s supervisory board assert claims for damages against former Volkswagen Group CEO Martin Winterkorn and former Audi CEO Rupert Stadler for breaches of duty.

    In addition to the aforementioned sum from its D&O insurers, Volkswagen will receive 11.2 million euros (RM56.1 million) from Winterkorn, and 4.1 million euros (RM20.5 million) from Stadler. Former Audi board member Stefan Knirsch will pay 1 million euros (RM5.01 million), while former Porsche board member Wolfgang Hatz will pay 1.5 million euros (RM7.52 million).

    The agreement for compensation will still need to pass resolution at the upcoming general meeting that is to be held on July 22, said Volkswagen, adding that former Audi executive Ulrich Hackenberg “was not prepared to reach an agreement.” The Audi board instructed for legal action to be taken against Hackenberg, the statement by Volkswagen read.

    In March, Volkswagen said it found that an investigation concluded that Winterkorn had breached his duty of care. The agreement with the former executives was made following a review of liability claims that were conducted on behalf of the automaker’s supervisory board by law firm Gleiss Lutz.

    The tampering of emissions test results were initially blamed on a small group of engineers, which in August 2017 saw a former Volkswagen engineer receive a 40-month prison sentence for helping to devise software for the emissions defeat devices.

    Former executive Oliver Schmidt was sentenced to seven years in prison later that year in December 2017, in addition to a US$400,000 (RM1.63 million) fine for his part in the scandal; Schmidt was the automaker’s emissions compliance manager from 2012 until February 2015.

    The automaker was discovered in September 2015 to have used emissions defeat devices in its vehicles, for which then-CEO Winterkorn issued an apology. This was later found to go beyond the VW brand and into vehicle in the wider VW Group with it 3.0 litre turbodiesel V6, which the automaker confirmed.

    To date, the ongoing scandal has cost the company more than 32 billion euros (RM161.2 billion) incurred in fines, component refits and legal fees.

  • Ex-Volkswagen CEO Martin Winterkorn agrees to pay €10 million in dieselgate scandal damages – report

    Former Volkswagen Group CEO Martin Winterkorn has agreed to pay around 10 million euros (RM50.4 million) in damages to the automaker over the dieselgate scandal that broke out in September 2015, Business Insider reports. This, after Volkswagen said in March this year that it would claim damages from Winterkorn and ex-Audi boss Rupert Stadler.

    Volkswagen also said in March that a far-reaching legal investigation concluded that Winterkorn had breached his duty of care. To this day, Winterkorn, 73, and Stadler, 58, continue to deny being responsible for the scandal, but they are facing criminal charges in German courts.

    To recap, the automaker in September 2015 admitted to using emissions defeat devices to cheat US emission tests. The scandal has cost the company over 32 billion euros (RM161.2 billion) in fines, refits and legal fees.

    Winterkorn resigned as VW CEO a week after the scandal broke, and was subsequently indicted on charges of breach of trust, tax evasion and false certification. The charges could land him a prison sentence of 10 years if he was found guilty.

  • Volkswagen HQ raided again over diesel emissions scandal, for documents pertaining to EA 288 engine

    The Dieselgate issue just won’t go to rest. Earlier this week, German public prosecutors raided Volkswagen’s headquarters in Wolfsburg again to confiscate documents, this time pertaining to the EA 288 diesel engine, Reuters reports.

    The raid on Tuesday is the latest episode in the automaker’s long-running diesel emissions scandal saga, which began in 2015 when it admitted to using trick software a.k.a. defeat devices to cheat US emissions tests.

    Following the raid, Volkswagen said it was fully cooperating with the authorities, but viewed the investigation as unfounded, saying it had disclosed the issue at the heart of the new investigation – which is targeting individual employees – to the relevant authorities, the report added.

    Former VW Group CEO Martin Winterkorn (left) and former Audi CEO Rupert Stadler.

    The company said that in simulations, vehicles equipped with the EA 288 engine did not indicate a failure of the diesel filter, while still complying with emissions limits. The company added that the engine did not have an illegal defeat device.

    The ensuing fallout has so far cost the company about 30 billion euros ($33 billion) in fines, numerous refits to impacted vehicles and provisions, as well as a global backlash against diesel vehicles.

    The scandal has already claimed former Audi CEO Rupert Stadler, who along with three others were charged with fraud, false certification and criminal advertising practices. In April this year, German prosecutors charged ex-CEO Martin Winterkorn and four others with fraud over their role in the manipulation of emissions testing, and in September, prosecutors indicted current VW Group CEO Herbert Diess for holding back crucial information over the issue.

  • VW CEO Herbert Diess indicted over Dieselgate cover up, along with chairman Poetsch, ex-CEO Winterkorn

    VW Group CEO Herbert Diess

    German prosecutors in the city of Braunschweig have accused Volkswagen Group CEO Herbert Diess of holding back market-moving information on rigged emissions tests four years ago. The prosecutors said on Tuesday they would press criminal charges of stock market manipulation against Diess, as well as non-executive chairman Hans Dieter Poetsch and former CEO Martin Winterkorn, according to Reuters.

    VW, which in September 2015 admitted using trick software a.k.a. defeat devices to cheat US emissions tests, has coughed out more than $30 billion in vehicle refits, fines and provisions. This latest indictment isn’t specifically about Dieselgate, but is part of a separate legal push to try management over an alleged delay in informing investors of the company’s wrongdoing. If accepted by a Braunschweig state court, the indictment would lead to a trial date being set.

    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, the plaintiffs argue.

    Former VW Group CEO Martin Winterkorn

    The carmaker is holding firm though. Lawyers for the three men said they would contest the charges that they knowingly held back vital information. VW said its full supervisory board would convene today to discuss the indictments. In a statement issued after an emergency meeting, the board’s executive committee said it “cannot see that there was any deliberate attempt not to inform the capital market.”

    Diess’s lawyer said the indictment would not affect his role as CEO, adding that as Diess – which prior to being group CEO was chairman of the board at the Volkswagen brand – did not join the company until July 2015, he could not have foreseen the scandal would have such a big impact on the company.

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

    Former Audi CEO Rupert Stadler

    As for Winterkorn, prosecutors allege that the former CEO – who resigned in the days after the scandal broke after eight years at the the helm – was fully aware of the matter and potential financial damage to Volkswagen as of March 2015. Poetsch, who became a management board member at Volkswagen in 2003 and was made chairman in 2015, was allegedly informed on June 29 and Diess on July 27 that year.

    This latest development shows that the fallout from Dieselgate isn’t over yet, even as VW is taking on a new image and rolling out electric cars. It has already claimed former Audi CEO Rupert Stadler, who along with three others were charged with fraud, false certification and criminal advertising practices. Braunschweig prosecutors in April charged Winterkorn and four others with fraud over their role in the manipulation of emissions testing.

  • VW CEO: diesel cheating claims unfounded – report

    Volkswagen CEO Herbert Diess told German daily Tagesspiegel that he did not fail in his duty to inform investors regarding the gravity of the diesel emissions cheating scandal which first surfaced in 2015, Reuters reports. “I believe that the allegations made against me are unfounded. This is also the result after the viewing of files,” Diess said to the German daily.

    Shareholders sued the German automaker for violating disclosure rules, arguing that the company failed to inform investors of the financial impact as a result of the scandal, which only came to light after the US Environmental Protection Agency (EPA) issued a notice of violation on Spetember 28, 2015.

    The company lost 37% of its value in the days following the discovery of its illegal emissions, though it has said that its managers could not have foreseen the financial scope of the scandal which has cost the company over 30 billion euros (RM140.3 billion) so far, the report said.

    VW diesel engine

    Volkswagen insists that the EPA’s issuance of the notice violation was not in keeping with the US authorities’ handling of similar cases involving other automakers, while the German automaker did not see the need to inform investors as other carmakers had arrived at a settlement for emissions cheating cases without an EPA notice of violation, and also because VW was already engaged in settlement talks at the time, Reuters noted the automaker’s filing with the Braunschweig court.

    The automaker also said that there was no need to issue an ad-hoc disclosure notice under German law because previous penalties by US authorities for similar violations came to less than US$200 million, the report noted VW as saying in the court filing.

    The German marque has weathered quite a bit, to say the least. A €1 billion fine was imposed by the public prosecutor’s office June last year in Braunschweig, Lower Saxony for organisational deficiencies, followed shortly thereafter by the arrest of then-CEO of Audi, Rupert Stadler for fears of potential cover-ups.

  • Ex-VW CEO Martin Winterkorn charged with fraud over dieselgate coverup, could face 10-year jail sentence

    After years of investigation, German prosecutors have filed aggravated fraud charges against former Volkswagen CEO Martin Winterkorn. He formerly led the company when it deceived regulators about its vehicles’ diesel exhaust levels.

    The charges represent the first criminal indictment in Germany against an individual in connection with the dieselgate scandal, one which has cost the Wolfsburg automaker billions of dollars since 2015. Four other Volkswagen managers were charged as well, although their names have not been released due to German privacy laws.

    According to The New York Times, the public prosecutor’s office in Braunschweig tied all five individuals to events reaching as far back as 2006, when the deception was initially conceived. It said the timeline is significant because it rejects initial claims by Volkswagen that senior management only became aware of the defeat devices used to cheat emissions tests only after being confronted by the United States environmental authorities in 2015.

    Winterkorn’s indictment includes charges of breach of trust, tax evasion and false certification, either directly or by way of collusion. If convicted, the 71-year-old could be jailed for up to 10 years. Besides Winterkorn and four others, the prosecutor’s office is also investigating 36 other individuals who could face charges, although no timeline was given.

    Prosecutors added that Winterkorn continued to conceal the emissions fraud even after he was told that outsiders were questioning the company’s emissions data. He was also charged with approving a ‘useless’ software update in 2014 at a cost of 23 million euros (RM107.5 million), despite knowing that it would not eliminate the cheat devices.

    There are over nine million cars with faked emissions tests that were licensed in Europe and the US, the indictment said. Prosecutors are also looking to seek repayment of bonuses, the highest of which was close to US$ 12.5 million (RM51.7 million).

    Winterkorn stepped down as VW’s CEO in 2015 and made a formal apology in video, all while denying any wrongdoing. No arrest warrant has been issued as yet – Winterkorn is under indictment in the US and is unlikely to leave Germany for fear of being extradited. Under its constitution, Germany has strict limits to the extradition of its nationals.

    The dieselgate scandal has caused quite a stir in the Volkswagen Group as a whole, with high profile executives leaving in droves and a few others arrested. Multiple projects have been cancelled to help cushion costs involved in large scale rectification programmes and billions in fines.

  • German court orders Volkswagen to reimburse 2012 Golf owner in full (RM142k) over Dieselgate scandal

    Volkswagen has been given an order by a German court to fully reimburse the owner of a Golf TDI the full original price (around 30,000 euros, or RM142k) of his vehicle, which was bought in 2012. This is due to the automaker’s long-running Dieselgate scandal, Bild newspaper reported.

    The Augsburg civil court ruled Volkswagen had acted immorally by installing emissions-cheating software and had aimed to increase sales and profits by deceiving customers. To date, approximately 11 million cars worldwide were fitted with the emissions-cheating software, which was specifically designed to limit noxious car fumes under certain conditions.

    This comes on top of the company’s move to pay billions of dollars in the United States to settle similar claims by some 500,000 owners. Each affected Volkswagen, Audi and Porsche vehicle owner were reportedly given USD$5,000 (RM21k), and VW will also bear the full cost of fixing each vehicle in the country.

    However, there won’t be a similar deal in Europe, where Volkswagen faces billions of euros in claims from investors and customers in the worst business crisis in its history. Several top executives within the group are already serving prison time for what is widely considered as the most controversial scandal in automotive history.

  • Audi under investigation for forging chassis number and test records to cheat South Korean authorities

    Audi is once again in the hot seat as prosecutors in Germany launch an investigation into the alleged falsification of documents, mileage readings and vehicle identification numbers for several Audi models sold in South Korea since 2013. Three Audi non-board members are currently being probed, according to a Wall Street Journal report.

    Munich prosecutor Karin Jung told the publication that “we have three suspects, but there could be more.” The three non-board members are suspected of manipulating test results and mileage readings of the vehicles and falsifying the serial numbers, the prosecutor added. These misdeeds were done in order to obtain roadworthiness certifications required for Audi cars to be exported to South Korea.

    A report by German publication Süddeutsche Zeitung explained that the Audi models which were bound for South Korea did not comply with local regulations and would have not received operating permit, hence the falsification of information. In total, it was reported that 18 models were falsely registered with a forged chassis number. The case could be classified as fraud.

    Former Audi CEO Rupert Stadler

    This new probe is linked to a case that saw one Audi executive, a Korean national, convicted of fraud in South Korea last year. The executive was sentenced to 18 months in prison for falsifying documents to achieve certification of the vehicles for export to South Korea.

    Prior to this, Audi was already running internal investigations into the case, but the findings (which included detailed descriptions of the violations) were not handed over to the public prosecutors when the Dieselgate saga erupted. The documents were only discovered in March 2017 when a raid into its headquarters took place. However, it’s noted that Audi was under no legal obligations to alert authorities on the findings.

    This is just one of several probes of Audi, which stemmed from 2015 when Volkswagen AG admitted to rigging millions of diesel-powered vehicles to cheat emissions tests. However, this matter is not directly related to the emissions cheating, which saw former Audi CEO Rupert Stadler get arrested in June based on the allegations that he tried to tamper with witnesses in the diesel probe.

  • Audi CEO arrested over fears of Dieselgate coverup

    The investigation into Volkswagen’s diesel emissions cheating scandal rages on with the arrest of Audi’s current chief executive officer Rupert Stadler, according to Munich prosecutors. This news comes from Automotive News Europe, which reported that the executive is being held in custody because investigators feared he might be seeking to suppress evidence in relation to the probe.

    “The suspect has been seen by a judge, who has ordered him to be remanded in custody,” read a statement from the prosecutor’s office, which widened its investigation against Audi last week. It named Stadler among the suspects accused of fraud and false advertising.

    Stadler’s arrest was confirmed by a spokesperson of the greater Volkswagen Group, adding that the presumption of innocence applied to his case. Audi had no immediate comment regarding the arrest, and Stadler himself as well as Munich prosecutors were not immediately available for comment.

    The public prosecutor’s office said that it was investigating 20 suspects, and that it had raided apartments of Stadler and another board member last Monday. That other member is said to be Audi’s head of purchasing Bernd Martens, according to a person familiar to the investigation, who declined to be named because prosecutors had yet to disclose the name, Reuters reported.

    Martens led a diesel task force at Audi, set up to coordinate the handling of the so-called Dieselgate scandal with its parent company.

  • Dieselgate: Volkswagen fined €1 billion by Germany

    Volkswagen has been fined one billion euros (RM4.7 billion) over diesel emissions from the company’s cars, according to Reuters. The fine was imposed by the public prosecutor’s office in Braunschweig, a city in Lower Saxony, Germany for organisational deficiencies which failed to prevent “impermissible software functions” from being installed in cars between 2007 and 2015, the report said.

    This follows the country’s recall of 238,000 Daimler vehicles earlier this week as part of a larger, Europe-wide recall of 774,000 vehicles, and the German transport minister also threatened to sue Daimler for 3.75 billion euros should it be found to have used defeat devices in its diesel vehicles.

    The latest fine imposed on Volkswagen did not address civil claims or claims made by vehicle owners, the prosecutor’s office said in a statement. This however concludes the regulatory offence proceedings against Volkswagen, which the automaker said would help in settling further administrative proceedings against itself in Europe, the report said.

    The one billion euro fine was not accounted for in Volkswagen’s 25.8 billion euro provision for Dieselgate-related fines, payouts, fixes and penalties, and would impact upon the Wolfsburg carmaker’s earnings, analysts at Evercore ISI said.

    Further afield in the greater Volkswagen Group, Porsche recalled 60,000 diesel SUVs last month at the request of German authorities. Though Porsche announced that it accepted full responsibility towards its customers, it added that it “does not develop or manufacture diesel engines itself.” The 4.2 litre V8 and 3.0 litre V6 in the Cayenne and Macan respectively were developed by Audi.

    Earlier this week, Reuters reported that the Munich public prosecutor’s office had searched the resepctive properties of Audi CEO Rupert Stadler and one other Volkswagen board member.


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Last Updated 26 May 2022