The Volkswagen chief executive and his predecessor are facing an investigation by German authorities into whether they misled investors by not releasing information about the company’s cheating on diesel emissions tests soon enough.
Prosecutors in Stuttgart yesterday formally launched their case against Matthias Müller and his predecessor Martin Winterkorn, who resigned as VW chief executive when the diesel emissions scandal broke in September 2015. The investigation relates to their role as executives in 2015 at Stuttgart-based Porsche Automobil Holding SE, the holding company that controls Volkswagen. Porsche SE chairman Hans Dieter Pötsch is also under investigation.
Prosecutors confirmed media reports that Germany’s federal financial supervisory authority filed a complaint in 2016 asking prosecutors to investigate executives from the holding company. They are accused “of knowingly delaying telling shareholders about the financial consequences for Porsche SE of software manipulation in diesel vehicles by Volkswagen AG”.
Porsche SE said in a statement: “We are convinced that we have duly fulfilled our capital market disclosure requirements.” A Volkswagen spokesman refused to comment on the prosecutors’ statement when contacted by Agence France-Presse.
VW has admitted equipping around 11m cars worldwide with software that sensed when cars were on test stands and turned emission controls up, then turned the controls off during every day driving to improve performance. It has agreed to at least $16bn (£12bn) in civil settlements with environmental authorities and car owners in the US, and to a $4.3bn criminal penalty. Seven VW executives have been criminally charged in the US.
The company also faces investor lawsuits in Germany alleging it did not inform shareholders of the scandal quickly enough. VW says it met its duties. The company apologised for the scandal and says it is changing its culture and practices.
In a separate development on Wednesday, the EU launched legal action against Italy over claims it overlooked attempts by Fiat Chrysler to cheat on diesel emission tests.
Italy has become the latest member state to be accused by the European commission – the EU’s executive body – of ignoring the installation of so-called defeat devices in cars, in a scandal that continues to reveal both the alleged illegal practices of major manufacturers and the weakness of national regulators.
The move by the European commission against Italy came despite a last-minute call for a postponement by its government. In a statement, Italy’s transport minister, Graziano Delrio, claimed there was a “need to delay the start of the infringement procedure” to allow for further clarifications.
The plea fell on deaf ears, and Italy now joins the Czech Republic, Germany, Greece, Lithuania, Luxembourg, Spain and the United Kingdom in being formally accused by the EU of failing to regulate the use of cheat devices.
In January, the US EPA alleged that Fiat Chrysler had used “management software” that “increases air pollution” from nitrogen oxides over a three-year period in its Jeep Cherokee and Dodge Ram vehicles.
Commissioner Elżbieta Bieńkowska, responsible for internal market, industry, entrepreneurship and SMEs, said: “Car manufacturers have been treating emission tests laxly – some have even broken the law. The emissions scandal has shown that the responsibility to enforce the law and punish those who violate it can no longer be left solely to individual member states.
“While the European parliament and member states have recently made good progress on our proposal to overhaul the current system, it’s high time that they reach a final agreement. Citizens’ health and trust is at stake and we have no time to lose.”
Under current EU law, national authorities are responsible for checking that a car type meets all EU standards before individual cars can be sold on the single market. When a car manufacturer breaches the legal requirements, national authorities are expected to recall models and “apply effective, dissuasive and proportionate penalties laid out in national legislation”.
Ugo Taddei, a lawyer for ClientEarth, said: “The commission’s action highlights that the Italian government tried to whitewash emissions cheating by Fiat Chrysler rather than protect the health of its citizens.
“The Italian case is particularly alarming but, unfortunately, this reluctance to deal with the problem of emissions controls strategies employed by car manufacturers is a pan-European failure.”
Fiat Chrysler has previously rejected the allegations against it, saying that it “believes that its emission control systems meet the applicable requirements”.
