German prosecutors have launched a probe against former Volkswagen Chief Executive Martin Winterkorn and another senior executive who are suspected of possible market manipulation related to the carmaker’s emissions scandal.
The prosecutor’s office in Braunschweig said in a statement on Monday the new probe centered on “sufficient real signs” that Volkswagen’s (VW) duty to disclose the possible financial damage of its manipulations may have arisen prior to Sept. 22, 2015 when the carmaker publicly admitted to its wrongdoings.
Braunschweig prosecutors have been investigating 17 former employees at VW, including lower-level managers, for suspicion of fraud related to the scandal.
The new probe will add to VW’s growing legal headaches and be grist to the mill of investors seeking to challenge the carmaker’s top management at the annual shareholder meeting on Wednesday.
Current VW Chairman Hans Dieter Poetsch, the carmaker’s finance chief at the time, is not being probed, the prosecutor’s office said, without disclosing the name of the second top executive under investigation prompted by charges filed by Germany’s BaFin financial regulator.
“Whether the stated initial suspicion will grow stronger or weaker depends on the findings of the necessary further investigations,” the prosecutor’s office in Braunschweig near VW’s Wolfsburg headquarters said.
VW will study the prosecutors’ statement before commenting further, a company spokesman said.
Europe’s largest automaker acknowledged in its annual report on April 28 that it had not grasped the potential impact of its diesel emissions scandal until last summer when it realized that software “defeat devices” in its cars may have violated U.S. environmental law.
“According to the assessment at the time by the members of the Board of Management dealing with the matter, the scope of the costs expected as a result by the Volkswagen Group was basically not dissimilar to that of previous cases in which other vehicle manufacturers were involved, and therefore appeared to be controllable overall with a view to the business activities of the Volkswagen Group,” VW’s annual report said.
Because similar cases had been resolved amicably with U.S. authorities, the Environmental Protection Agency’s Notice of Violation issued on September 18, 2015 came as a surprise, Volkwagen said, adding that the “facts and financial consequences then presented the situation in a completely different light.”
(Reporting by Andreas Cremer and Edward Taylor. Additional reporting by Joern Poltz.; Editing by Tina Bellon and Georgina Prodhan)