Volkswagen Chief Executive Matthias Müller is officially under investigation for his role in the company’s emissions scandal, prosecutors in Stuttgart confirmed on Wednesday. The confirmation comes a week after Handelsblatt sister publication WirtschaftsWoche reported the investigation.
Prosecutors are investigating Mr. Müller along with VW Supervisory Board Chairman Hans Dieter Pötsch and the group’s former CEO Martin Winterkorn to ascertain whether the three men knew of the scandal before it became public and whether they should have informed shareholders of Porsche SE earlier.
The three men were board members of Porsche SE, the holding controlled by the Porsche and Piëch families that owns 52.2 of VW Group. The families own most of Porsche SE, with a small part listed on the Frankfurt stock market.
Mr. Müller, the former head of the VW subsidiary Porsche, so far had managed to avoid any links to the scandal, known as Dieselgate. But now prosecutors suspect he knowingly avoided telling shareholders about the manipulative software for the financial benefit of the business.
“Publicly traded companies have an obligation to immediately publish information … that is likely to have a significant effect on the exchange or market prices,” the prosecutors said in a statement.
Proven market manipulation can result in drastic penalties of up to five years in prison or a significant fine.
Porsche SE denied the allegation, saying it informed its shareholders in a timely manner. Lawyers of Mr. Winterkorn and Mr. Pötsch declined to comment, nor did VW want to react to the latest news about its chief executive. The carmaker previously denied the allegations, saying that shareholders had been informed on time.
For Andreas Tilp, a lawyer representing hundreds of VW and Porsche investors in lawsuits over the firms’ alleged delay in disclosing market-sensitive information, the investigations do not come as a surprise.
“Investigations by the Stuttgart prosecutors office into VW boss Matthias Müller confirm our assessment,” Mr. Tilp told Handelsblatt. “VW and Porsche have informed way too late on the risks that result from the deployment of manipulated software.”
Clients of Mr. Tilp suing Porsche SE have brought forward claims totaling some €1 billion.
“The success of our lawsuits does not hinge on the investigations. In my opinion, we have everything we need to successfully claim damages, regardless of the outcome,” Mr. Tilp believes, adding that he wanted to push ahead with his clients’ claims irrespective of the investigations.
WirtschaftsWoche reported last week that former Porsche SE manager Philipp von Hagen was also under investigation, but he was not listed in Wednesday’s press release.
In September 2015, when Dieselgate became public, Mr. Müller was CEO of the automaker Porsche. He took over from Mr. Winterkorn a week after US regulators revealed the scandal.
Prosecutors in Braunschweig are already investigating Mr. Pötsch and VW brand chief executive Herbert Diess over alleged violations of disclosure and market manipulation rules.
To date, the scandal has cost Volkswagen up to $22 billion in US fines and settlements as well as repair or buy back expenses for more than 500,000 affected vehicles. The automaker still faces billions of euros in claims from customer groups and shareholders.