Dieselgate

VW gets €1 billion fine in Germany for diesel fraud

Volkswagen Wolfsburg
Finevergnügen. Source: Picture Alliance/dpa

German prosecutors levied the first fine against Volkswagen in the automaker’s home country for cheating on diesel emissions. The penalty of €1 billion ($1.2 billion) was one of the largest-ever imposed on a German company, though relatively mild compared to the $26 billion VW has paid to settle criminal and civil suits in the US.

VW “accepted” the fine, saying it wouldn’t challenge it in court. The company said it brings the non-compliance proceedings in Germany to a close, and expressed the hope it would have a “significant positive impact” on other proceedings against the company in Europe.

Prosecutors in Braunschweig said the company failed to properly supervise development of the engine with defeat devices, so that 10.7 million vehicles with the illegal software were sold worldwide between 2007 and 2015.

The fine against the company does not affect the criminal investigations underway against 39 suspects. Indictments will follow as soon as sufficient evidence of criminal behavior has been gathered. Suspects include current and former employees involved with the manipulation of nitrogen dioxide emissions, and six others in connection with false carbon dioxide claims. One suspect is under investigation for destruction of data.

Three others are being investigated for market manipulation for concealing information about the cheating from the public. These are the current CEO, Herbert Diess, supervisory board chairman Hans Dieter Pötsch and former CEO Martin Winterkorn.

Mr. Winterkorn is also being investigated for the emissions cheating itself. Mr. Winterkorn has been indicted in the US on fraud charges. He has repeatedly denied the charges. Last week, prosecutors in Munich disclosed that the CEO of VW’s Audi luxury unit, Rupert Stadler, is being investigated in connection with the diesel fraud.

Several Handelsblatt reporter contributed to this article. Darrell Delamaide adapted it into English for Handelsblatt Global. To contact the author: d.delamaide@extern.handelsblatt.com.

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