VW shares fall on new evidence: Prosecutors in industrial espionage case say material was taken from General Motors

SHARES in Volkswagen fell yesterday as prosecutors investigating suspicions of industrial espionage against the car maker's number two, Jose Ignacio Lopez de Arriortua, said evidence had been uncovered of material taken from its rival, General Motors.

The stock closed down DM14.30 ( pounds 5.85) at DM524.50 ( pounds 214) at the end of official trading, following a statement from the Darmstadt prosecutors' office that computer diskettes and papers, seized in a police raid last year from executives who joined VW from GM, contained information suspected of coming from the US car manufacturer and its European subsidiary, Opel.

Opel managers had identified this information as secret. The prosecutors also said a diskette was found in the home of Mr Lopez containing data on cost-saving programmes for GM models. Plans seized in Mr Lopez's office at VW for a super-lean car plant bore a striking resemblance to confidential plans developed while he was purchasing chief at General Motors.

'After months of detailed investigation, far from weakening the case, our suspicions have been considerably strengthened,' said a spokesman for the prosecutors' office.

Yesterday's statement also said documents found at a flat in Wiesbaden, where close associates of Mr Lopez who had also left GM for Volkswagen lived, contained secret Opel plans for a small car project. The prosecutors said further investigation is needed to ascertain whether this information ever came into the VW corporation.

The prosecutors' office refused to speculate about eventual charges against Mr Lopez, saying the investigation continues, and a number of legal issues still need to be clarified.

These include whether the documents found at VW came from Opel in Germany - in which case they would be subject to German law - or whether they came from GM in Detroit, in which case the US Justice authorities, who are also investigating document theft suspicions against Mr Lopez, would have to take action. Further, the matter of what constitutes secret data must be unambiguously established.

Volkswagen said: 'Nothing in the prosecutors' statement proves Mr Lopez is guilty of anything. Suspicious circumstances were listed, and now need to be clarified.'

Opel said it 'confirms our conviction that a large number of confidential documents were stolen for the benefit of a competitor'.

It added that the report commissioned by Volkswagen last autumn from independent auditors, KPMG, which found no evidence of industrial espionage, was shown by the prosecutors' findings to be incomplete and unreliable. The prosecutors' office did not say when the investigations would be finished.