Charges have been brought against the top management of Volkswagen for market manipulation.
Update from May 20, 2020: Another procedure in the VW diesel scandal has ended prematurely: Volkswagen boss Herbert Diess and the chairman of the supervisory board Hans Dieter Pötsch do not have to answer to the court for alleged market manipulation. As the district court in Braunschweig announced on Wednesday, the proceedings against a payment of EUR 4.5 million each had been terminated, and the main trial does not take place. The case against ex-CEO Martin Winterkorn , who is also accused , continues.
Volkswagen had previously announced that it would pay a total of nine million euros to end the previously unpublished procedure for Diess and Pötsch. According to the court, the money was already received by the state of Lower Saxony. The judges had therefore agreed with the Braunschweig public prosecutor's office as well as the two suspects and their defense lawyers on this solution.
Former VW CEO Martin Winterkorn, however, must continue to fear being tried in Braunschweig for market manipulation . The public prosecutor filed a corresponding charge against the three managers last September, accusing them of deliberately informing the capital market of the diesel scandal at Volkswagen too late and "unlawfully influencing the company's stock market price".
The scandal was announced on September 18, 2015. At the time, Winterkorn was the head of the VW Group, Diess' newly minted boss of the VW brand, Pötsch CFO. According to the indictment, Diess should have had "full knowledge of the facts and the possible damage to the company by the end of July", Pötsch even a month earlier. Volkswagen and the two managers had always denied the allegations.
Charge against Volkswagen top for market manipulation - VW reacts
Update from September 27, 2019: The VW Group considers the criminal charges against the incumbent management duo to be baseless even after reviewing the files. "The public prosecutor has no information that we do not know," said VW criminal defense attorney Daniel Krause in Wolfsburg on Thursday. "We remain firmly convinced that the company has properly fulfilled its capital market obligations."
The public prosecutor's office in Braunschweig had filed charges against the head of the supervisory board, Hans Dieter Pötsch, and the chief executive officer, Herbert Diess, on Tuesday. According to the investigators, in their former functions as Group Chief Financial Officer and Chief Brand Officer, they were “intentionally too late” to inform investors about the consequences of diesel manipulation in the USA. Ex-CEO Martin Winterkorn is also charged. The price of the VW preference share had collapsed by almost half within a few days when the diesel affair became known.
"A defeat device itself is price-neutral," said Krause with regard to the use of the illegal shutdown device in diesel engines in the USA. "Only the resulting economic consequences are relevant for the capital market". These would have occurred with an overwhelming probability and, in addition, had a price relevance for the share. For Volkswagen AG, this amounts to at least 1.1 billion euros in damage.
Until September 18, 2015, the board had assumed that the talks with the US authorities would lead to a friendly solution, the economic consequences of which would be far below, said VW. It was only after the “Notice of Violation” published by the US environmental agency EPA that the “environmental protection” published “completely unexpectedly” that this turned out to be incorrect.
Charge against Volkswagen top for market manipulation
Braunschweig - The public prosecutor's office in Braunschweig has charged Volkswagen's top management with market manipulation. Chairman of the Supervisory Board Hans Dieter Pötsch, CEO Herbert Diess and ex-CEO Martin Winterkorn are accused of not informing investors in good time about the risks of the diesel affair in 2015. The law enforcement officers announced on Tuesday.
Investors are demanding compensation for the collapse in the share price at the time
The prosecutors had examined whether the VW managers knew earlier than previously that there had been concrete deceptions regarding the exhaust gas data in the USA. According to the investigation, this was the case. The announcement stated: "The aforementioned - former or incumbent - members of the Board of Management of Volkswagen AG are accused of deliberately informing the capital market of the considerable payment obligations of the group in the billions of euros resulting from the exposure of the so-called diesel scandal, contrary to their legal obligation and thus have had an illegal influence on the company's stock market price. "
Investors are demanding compensation for the collapse in the share price at the time: They argue that the VW leadership should have told the financial world about the risks of the diesel crisis earlier. A capital market model process is also running in Braunschweig.
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VW diesel affair: managers are suspected
Pötsch was the CFO of the Volkswagen Group when CEO Martin Winterkorn at the time granted exhaust gas manipulations to diesel car engines in the United States. The extent of the scandal only became clear afterwards: millions of vehicles worldwide were affected, many owners of VW shares suffered price losses. Today's CEO Diess joined the group in summer 2015 and was initially only the head of the Volkswagen core brand.
VW had had to admit after tests by US environmental authorities and researchers that it had set the exhaust gas software of certain diesel engines so that significantly more toxic nitrogen oxides (NOx) were emitted during actual operation on the road than in pollutant tests. The manipulations became known on September 18, 2015 - the managers were suspected of not having dealt with the impending financial risks long before this date, despite possible indications.