VW bosses were told costs of emissions cheating scandal a month before investors

A Volkswagen manager told the then chief executive that the carmaker's diesel emissions cheating could cost up to £14.35bn, almost a month before investors were informed

Edward Taylor,Jan Schwartz
Monday 10 July 2017 13:27
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Investors were told about VW's systematic emissions test cheating using illegal software on 18 September 2015
Investors were told about VW's systematic emissions test cheating using illegal software on 18 September 2015

A Volkswagen manager told the then chief executive and other managers that the carmaker’s diesel emissions cheating could cost up to $18.5bn (£14.35bn), almost a month before investors were informed, German newspaper Bild am Sonntag reported.

Investors were told about VW’s systematic emissions test cheating using illegal software on 18 September 2015, when the US Environmental Protection Agency (EPA) informed markets.

The Sunday newspaper Bild am Sonntag reported that Oliver Schmidt, a VW executive who was arrested in Miami in January this year, told the then CEO, Martin Winterkorn, about possible financial implications at an 25 August 2015 presentation.

German securities law requires firms to publish any market-sensitive news in a timely fashion. A probe by German prosecutors includes investigating whether VW disclosed details promptly.

The newspaper said Mr Schmidt informed Mr Winterkorn about the maximum possible penalty at the meeting, which was also attended by Heinz-Jakob Neusser, VW’s development chief at the time, and Herbert Diess, who still works as VW’s brand chief.

Bild am Sonntag cited US investigation documents.

A VW spokesman said the firm would not comment on the report because of ongoing legal and regulatory investigations. It has previously said it did not violate disclosure rules. The VW spokesman also said Mr Diess had no comment.

Lawyers for Mr Winterkorn, who stepped down as VW CEO in September 2015, could not immediately be reached for comment. Annette Voges, the lawyer for Mr Neusser, who also left his position in September 2015, declined to comment on behalf of her client, saying she had not seen the statements by Mr Schmidt.

A lawyer for Mr Schmidt also declined to comment.

VW admitted using a “defeat device”, the name used to describe software to deceive regulators about the real extent of diesel pollution, to the US EPA and California’s Air Resources Board on 3 September 2015, according to VW’s annual report for last year.

In the report, VW said its management did not make details of the scandal public before 18 September 2015 because board members considered costs to be “controllable overall with a view to the business activities of Volkswagen Group”.

German prosecutors are investigating Mr Diess, Mr Winterkorn and VW’s current chairman, Hans Dieter Poetsch, as part of a wider probe into market manipulation. The executives have denied wrongdoing.

German prosecutors conducting the investigation into market manipulation declined to comment on Sunday.

Bild am Sonntag also reported that Mr Winterkorn and Mr Diess were informed VW had used a “defeat device” at a meeting on 27 July 2015. Mr Diess had joined VW just weeks earlier.

Reuters

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