Published: Fri, May 19, 2017
Economy | By Annette Adams

German prosecutors investigating VW's CEO over scandal

German prosecutors investigating VW's CEO over scandal

The chief executive of German auto giant Volkswagen is under formal investigation for the first time in relation to the emissions scandal which rocked the company in 2015.

A spokesman for Porsche SE said the charge was unfounded and that the company fulfilled its obligations to inform financial markets in a timely fashion.

Rather, the Stuttgart probe is looking into whether as members of Porsche SE's board they withheld information from investors about an unfolding USA investigation into the manipulation before it became public in 2015, causing Volkswagen's shares to drop and exposing shareholders to big losses.

The company is in the process of removing the illegitimate software that allowed it to cheat tests, which it insists will inflict no loss of value on auto owners in Europe.

German prosecutors suspect that the two executives, Matthias Mueller and Hans Dieter Poetsch, may have delayed releasing information to investors.

Porsche SE manages the 52% stake in Volkswagen AG held by the heirs of Beetle inventor Ferdinand Porsche since sports auto maker Porsche AG was folded into Volkswagen in 2012.

A Volkswagen spokesman refused to comment on the prosecutors' statement when contacted by AFP.

While it is the first time Mueller has been targeted by prosecutors over market manipulation, Winterkorn, Poetsch-a former chief financial officer and present supervisory board chief at VW-and VW brand chief Herbert Diess were already in the sights of a separate investigation for market manipulation in their VW roles.

Volkswagen faces an array of legal challenges in Germany and worldwide relating to its software, created to fool regulatory nitrogen oxide emissions tests.

Others face probes over incorrect carbon dioxide emissions data.

The multinational corporation would reportedly have to pay more than 22 billion euros ($24 billion) to cover fines and compensations related to the Dieselgate scandal.

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