Dieselgate isn’t over yet
Three important VW managers have again been accused of stock market manipulation. Daimler has agreed to pay a fine of 870 million euros. In the US, an engineer of Fiat Chrysler Automobiles has been accused of fraud concerning emission testing. Dieselgate is alive and kicking.
The justice department in Brunswick, Germany, has officially accused three important VW managers of “manipulating the stock market”. One of them is the former CEO, Martin Winterkorn, who also has other cases running against him.
More important is that the current Volkswagen Group CEO, Herbert Diess, has also been accused, as is Hans Dieter Pötsch, president of the supervisory board.
The three of them are being accused of “knowingly having informed the financial markets too late” about the consequences of the dieselgate scandal. By doing so, they influenced the stock price, has indicated the judicial prosecutor in Brunswick.
According to the prosecutor, the three managers have knowingly retarded emitting a warning to the financial world during at least some weeks, maybe months.
In the accusation act of 636 pages is stated that Winterkorn knew about the dieselgate fraud in the US as of May 2015. Mister Pötsch, then CFO, knew since the 29th of June, and mister Diess since the 27th of July.
The lawyers of Mr. Winterkorn have declared being surprised by the demand of the prosecutor and find it “incomprehensible”. Mr. Diess recently declared at the IAA Motorshow that resigning from his job if he was being inculpated by justice was “out of the question”.
The Brunswick accusations are not the first case for the German justice. Former CEO Winterkorn is already preparing for another trial where he is being accused of “fraud, abuse of trust, and violation of the law against disloyal competition”.
In the same line of accusations are those against Rupert Stadler, former CEO of Audi, who has been in jail for months, and has been removed from the Audi board during his imprisonment. As a reaction to this news, the VW share regressed 2,7% on Tuesday evening. In September 2015, it fell to 90 euros (from 162), but it recovered ever since to 152,7 euros last night.
Daimler pays off
Meanwhile, the car manufacturer Daimler has decided to pay the 870 million euro fine for having sold diesel cars (since 2008) that were not complying with emission regulations.
The German Kraftfahrt Bundesamt (KBA) (the German automotive agency) demanded in 2018 that Daimler should recall 700.000 cars in total worldwide, 280.000 of them in Germany.
The manufacturer had appealed against this decision and was calling back cars reluctantly. In an official reaction, Daimler “maintains its objections” against the KBA decision, but it also “refrains from appealing into court”. It prefers to pay the fine.
The Stuttgarter prosecutor has made clear that the payment of this fine will in no way influence the jurisdictional inquiries against physical persons, which will be continued.
The paying of the fine won’t influence the finances of Daimler because it already made provisions for the consequences of dieselgate. That’s one of the reasons the company was already in the red (1,2 billion euros) in the second quarter of this year, for the first time in 10 years.
FCA engineer under fire
Emanuele Palma, a high-ranked engineer within the Fiat Chrysler Automobiles Group, has been accused in the case of emission fraud. He was responsible for a group of engineers developing and calibrating the 3-liter diesel engine used in several vehicles of the group.
In Italy, a spokesman of FCA declared that “FCA was studying the case and is giving full cooperation to the US authorities”. The FCA management closed a deal with different American justice prosecutors in January paying fines of (in total) 880 million euros.