Mechanic staff work on the production line of Volkswagen e-Golf in the Glaeserne Manufaktur plant in Dresden, Germany.Matthias Rietschel/Reuters
German prosecutors could wrap up an investigation into alleged market manipulation by senior Volkswagen AG executives this year, prosecutors said on Thursday after ordering the car maker to pay €1-billion (US$1.16-billion) to settle emissions cheating claims.
On Wednesday, Braunschweig prosecutors fined Volkswagen for management lapses in failing to prevent cheating of diesel emissions tests, one of the biggest ever penalties imposed by German authorities against a company.
The €1-billion is not included in the €25.8-billion that Europe’s biggest car maker has so far set aside to cover costs related to its 2015 admission that it cheated on U.S. diesel emissions tests, and so it will hit earnings, analysts at Evercore ISI said.
German prosecutors are also investigating whether senior Volkswagen executives including chairman Hans Dieter Poetsch and chief executive Herbert Diess informed investors in a timely fashion about the size of potential fines faced by the car maker for cheating U.S. emissions tests.
The company denies any wrongdoing by its executives.
“On market manipulation, it is possible that there will be a decision this year. A decision does not necessarily mean bringing charges, it could mean closing the proceedings,” Braunschweig prosecutor Klaus Ziehe said at a news conference.
In a filing submitted to a Braunschweig court on Feb. 28, Volkswagen argued it did not violate ad hoc disclosure rules because it did not understand the scope of potential fines and claims faced by the company.
Four days before U.S. regulators blew the whistle on Volkswagen, Mr. Poetsch – the company’s chief financial officer at the time – saw the potential financial risk from emissions violations at €150-million, the court filing shows.
U.S. authorities disclosed Volkswagen’s systematic emissions cheating on Sept. 18, 2015, sparking the biggest business scandal in the company’s history and triggering a crackdown on emissions across the industry.
Reuters