Market manipulation charges against VW bosses to be dropped
May 20, 2020
Volkswagen chief executive Herbert Diess and supervisory board chief Hans Dieter Poetsch have avoided trial over "market manipulation" allegations with an out-of-court settlement of nine million euros, the German car giant said Tuesday.
"According to the assessment of the supervisory board, it is in the best interest of the company for the proceedings to be terminated," VW said.
It therefore agreed to pay €4.5 million ($4.93 million) to settle the charges against each of the top executives, it said.
The case had been one of many legal entanglements that Volkswagen had found itself in over its stunning revelation in 2015 that it had installed devices in 11 million diesel vehicles worldwide to make them seem less polluting when they were undergoing emission tests.
Dubbed Dieselgate, the practices employed by Volkswagen led to a crisis in confidence for the entire automobile industry, especially since similar workarounds were soon found at other companies. The case has kept VW tied up in lawsuits ever since.
German prosecutors in September charged the two VW bosses, along with former chief executive Martin Winterkorn, with "market manipulation."
Legal woes
Prosecutors argued that the VW chiefs should have informed shareholders about the investigation into the so-called defeat devices as soon as they learnt of it, not wait until US authorities dropped the bombshell news on September 18, 2015, sharply driving down the VW share price.
In their statement on Tuesday, Volkswagen's board said that "both at the time of the indictment... and today, the criminal law advisors and representatives of the company asserted that the accusations of the public prosecutor's office against Mr. Poetsch and Dr. Diess are not founded."
It is not clear if the offer to drop the market manipulation case will be extended to Winterkorn, who ran the company from 2007 to 2015 and stepped down after the scandal came to light.
In April last year, he was charged with serious fraud, unfair competition and breach of trust by prosecutors in Brunswick, alongside four other suspects.
His lawyers have reiterated that he is "blameless in this matter" and "will continue defending himself".
The dieselgate scandal tarnished VW's reputation and has so far cost the company over €30 billion ($33 billion) in fines, legal costs and compensation payments to car owners.
see/sri (AFP, dpa)