A new act has opened in Volkswagen’s diesel scandal after German prosecutors confirmed their market manipulation investigation has been widened to include supervisory board chairman, Hans Dieter Pötsch.
Their inquiry will now examine his role as group finance chief in the weeks and months before the September 2015 announcement that VW diesel engines contained cheat software to mislead emissions tests.
US revelations of the software plunged the German car giant into crisis. Weeks after a Californian court agreed to a $15 billion settlement between regulators and the German company, a fresh report claimed US regulators had found new cheat software in the engines of Audis, a VW subsidiary.
The new Audi revelations and extension of the stock market investigations suggest the German car company is far from out of the woods.
Mr Pötsch is not believed to be linked to the engineering arm of the scandal, but to a complaint by BaFin, Germany's financial regulator, that the company made an illegal attempt to limit the financial damage of the looming revelations.
This prompted prosecutors in Braunschweig, near VW's Wolfsburg headquarters, to open a market manipulation investigation last June into former chief executive Martin Winterkorn and Herbert Diess, the VW brand chief.
Shareholder law
However, shareholder groups, pursuing compensation for the loss in value of their holdings, have long demanded the inclusion of Mr Pötsch in the investigation. This will examine when exactly VW was obliged to inform shareholders about the US investigation and the cheat software and whether, as the prosecutor suspects, the company held back vital information “about likely, considerable financial losses of the concern”.
It is likely it will fall to German courts to decide whether VW’s announcement of the scandal on September 22nd, 2015 came too late and thus broke shareholder law.
In total some 1,400 shareholder complaints have been filed in Germany, demanding more than €8 billion in compensation for losses sustained by the diesel scandal.
VW said on Sunday it remained confident that its “management fulfilled its duties to inform capital markets”, and the company said Mr Pötsch would fully support the investigation of the Braunschweig prosecutors.
However, his inclusion in the inquiry draws an uncomfortable link between the old guard and the new VW management, at pains in the last months to break with the past and look to the future.
Audi cheat
Another blast from the past came with news that the California Air Resources Board (CARB) had identified a previously undiscovered switch in Audi engine software. This detected a test situation – wheels moving, steering wheel stationary – and switched to a cleaner mode to pass exhaust tests.
According to the Bild am Sonntag newspaper, Audi stopped using the software in May 2016, eight months after the VW revelations, and just before CARB made the discovery.
Without citing any sources, Bild said the Audi-specific software was built into several hundred thousand vehicles.
Last year Audi already admitted that around 85,000 of its high-end sports cars with 3.0 litre diesel engines used the VW cheat software.
