German prosecutors have said they are investigating Volkswagen’s CEO Matthias Muller, along with its former CEO Martin Winterkorn and Hans Dieter Potsch, the Volkswagen (VW) Supervisory Board chairman for market manipulation linked to Volkswagen emissions scandal after a complaint from the Federal Financial Supervisory Authority, Germany’s market and financial regulator. The criminal investigation into market manipulation moves was launched in February but was announced on Wednesday only.
Though Winterkorn and Potsch had been identified earlier as well as possible suspects in the market manipulation scandal that has plagued the world’s largest automaker since the last two years. Winterkorn had to resign because of this in September 2015 when the scandal broke, it is the first time that its present CEO Matthias Muller, who had replaced Winterkorn, has been named as a suspect.
According to a Deutsche Welle (DW) report, prosecutors in German city Stuttgart are investigating if there was a deliberate delay by Muller in informing the Volkswagen shareholders about the emissions cheating scandal. The investigation pertains to the period when Muller was heading Volkswagen main shareholding company, the Porsche Automobil Holding.
According to a report in the New York Times, if it is proved that top VW managers indeed withheld and then deliberately delayed the information about the large scale cheating being done in the automobiles of the company, it can cost the company $10 billion.
The VW emissions or pollution cheating scandal broke in September 2015 when the United States Environment Protection Agency (EPA) issued a notice to VW after it found a cheating software or “defeat device” in VW diesel engines in cars being sold in America that helped its vehicles bypass the stringent testing norms. From the US, it soon spread to many other countries of Europe, Asia and even Africa. The auto giant soon accepted its guilt but the scale of the scandal was so vast that skeletons are still tumbling out of its closet. Many top managers have been suspended and many are under scanner.
The scandal has cost VW $22 billion alone in the US in settlements and fines. Also, according to a Bloomberg report, the damages so far have cost the auto giant 22.6 billion Euros. It is facing multiple lawsuits in many countries including the US and Germany. It had to recall over 11 millions of its cars to address the cheating revelations. In December 2015, the automaker had announced to recall 3.4 lakh “defeat device” diesel cars, sold from 2008, in India but according to a report last month, only 30 per cent of those cars could have been fixed so far. The scandal, after broke, eroded the group’s brand value by over $15 billion while a Credit Suisse estimate said that the episode could cost VW $87 billion in the long run.
But it seems the Germany company’s strategy to iron out the mess has started paying back. In 2016, VW emerged as the world’s largest automaker dethroning Toyota who topped the selling charts for four years before it. Then its first quarter’s earnings this year have beaten the estimates. At $4.7 billion, the earnings are 28 per cent higher than the same quarter of the last year and 20 per cent higher than analysts’ expectations. It’s strategy to deal with the situation includes developing new lines of sports utility and hybrid vehicles and cost cutting with the VW brand vehicles.