Prosecutor to report on Lopez investigation

A GERMAN state prosecutor will report today on her investigations into charges of industrial espionage against Jose Ignacio Lopez de Arriortua, Volkswagen's production chief, and several other former General Motors colleagues.

The statement by the Darmstadt prosecutor is expected to reflect the outcome of interviews with numerous senior GM executives regarding the alleged gathering of large quantities of GM material by Mr Lopez and close colleagues before their departure for VW in March.

In particular, she is expected to deal with specific GM documents, including top secret plans for a new small car, found recently in a Wiesbaden flat rented by two former GM employees who followed Mr Lopez to VW.

The decision by the state prosecutor to make her first public statement was seen partly as a response to a Hamburg civil court ruling on Tuesday against VW.

On the basis of evidence from GM executives contradicting statements by Mr Lopez, the court lifted a gag obtained by Volkswagen on Der Spiegel magazine, which is now free to repeat claims of industrial espionage against Mr Lopez. VW said yesterday it was considering whether to appeal against the ruling, but will only decide after seeing the court's written reasons for the judgment, which may only be out in a few weeks.

Amid the growing negative publicity, doubts were being expressed by analysts about Mr Lopez's future with Volkswagen. 'We believe that (Mr) Lopez will leave in the next three or four months and this will have a short-term negative influence on the stock price,' said Gebhard Klingenstein at Barclays de Zoete Wedd in Frankfurt.