VW chief executive investigated as group refuses to publish dieselgate report

11 May 2017

11 May 2017 German authorities have widened their probe into the Volkswagen (VW) diesel scandal to include the company’s CEO Matthias Mueller, who took the role shortly after news of the manufacturer’s emissions cheating was revealed. Mueller is being drawn into prosecutor’s investigation of possible market manipulation alongside former CEO Martin Winterkorn and Hans-Dieter Poetsch, current chairman and former finance chief. The probe by Stuttgart investigators relates to Porsche AG and not VW itself, and is the first time Mueller has been linked to the scandal in any form. Investigators in Braunschweig, near VW’s Wolfsburg headquarters, are conducting their own market-manipulation probe that already includes Mr Winterkorn and Mr Poetsch. Stuttgart launched an investigation following a July 2016 complaint by BaFin, Germany’s Financial Supervisory Authority, which linked several Porsche SE executives to possible market manipulation by delaying disclosure of the scandal in 2015. Porsche AG controls 52% of VW’s voting shares. Meanwhile, at the Volkswagen Group annual general meeting in Hanover, Poetsch told 3,000 shareholders that the company would not be publishing the final report including conclusions of an external investigation into the emissions scandal conducted by US-based law firm Jones Day. The report is considered one of the most comprehensive in German corporate history, however the company believes that to make it public would subject it to the possibility of heavy fines and further lawsuits. While the company has settled with the US Department of Justice, there are still a number of civil litigations ongoing and official investigations pending in a number of markets. Poetsch told the delegates: ′I am aware that some of you wish for greater transparency. Often the publishing of a full report is demanded. To be clear: there is no written final report from Jones Day, nor will there be. I ask for your understanding that for legal reasons Volkswagen is prevented from publishing any such report.’ The findings of the Jones Day report were promised to shareholders just after the scandal broke in 2015, especially as it was the basis of the $4.2 billion (€3.8 billion) settlement with the Department of Justice. However the decision to not publish the findings was met with distain from attendees at the AGM. Investment advisory firm Hermes EOS said disclosing the report’s findings would allow VW to move on from its biggest-ever corporate crisis and help to build confidence in the car market. Shareholders are also demanding faster progress in reforms resulting from ′dieselgate’ despite the group showing a quick recovery in earnings. Settling outstanding legal claims and improving corporate governance were two areas that were raised to be incorporated in VW’s future strategy, alongside cost cutting and investment in cleaner cars. Gerd Kuhlmeyer, head of staff shareholders group Community of VW, told the meeting: ′I am shocked and speechless, that [current procedures] was the case at the time and it still is today. An end of ongoing investigation proceedings and possible further effects is not in sight.’ Photograph courtesy of Volkswagen Group

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