Volkswagen has been fined $1.5bn in emissions fraud scandal

AUTOMAKER Volkswagen says it’s being fined 1 billion euros ($1.550 billion) by German authorities in connection with the diesel emissions scandal.

Volkswagen said in a statement on Wednesday that it would accept the fine imposed by prosecutors in the German city of Braunschweig.

Prosecutors concluded that Volkswagen failed to properly oversee the activity of its engine development department, resulting in some 10.7 million diesel vehicles with illegal emissions-controlling software being sold worldwide.

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media_cameraWorkers inspect finished Volkswagen cars. The company installed emissions-cheating software into 11 million cars. Picture: Sean Gallup/Getty Images

The scandal, which came to light in the United States in 2015, has already cost the German automaker billions in penalties imposed by US authorities.

Volkswagen said it hoped that paying the German fine would have “positive effects on other official proceedings being conducted in Europe against Volkswagen” and its subsidiaries.

It comes after German prosecutors raided the home of Rupert Stadler, chief executive of Volkswagen subsidiary Audi, over suspicion of fraud related to diesel emissions cheating by the firm.

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media_cameraThe plant of German car maker Volkswagen in Wolfsburg, central Germany. Picture: AFP Photo / Odd Anderson

“Since May 30 the chief executive of Audi Professor Rupert Stadler and another member of the current executive board have been regarded as suspects,” prosecutors in Bavarian capital Munich said in a statement.

“They are each accused of fraud as well as indirectly falsifying certifications. This relates to bringing diesel vehicles fitted with manipulative emissions management software into circulation on the European market.”

The latest probe follows a mass recall ordered by German authorities earlier this month of some 60,000 Audi A6 and A7 cars across Europe to remove illegal emissions control software, while prosecutors raided offices and the homes of some workers in February, March and April.

media_cameraCEO of the German carmaker Audi AG, a Volkswagen subsidiary, had his house raided over suspicion of fraud related to diesel emissions. Picture: AFP Photo

Volkswagen admitted in September 2015 to manipulating 11 million diesel vehicles worldwide with software designed to reduce harmful emissions during testing but that allowed them to rise to many times legal limits in real driving conditions.

Since then investigators have been trying to unravel who was responsible for the installation of such so-called “defeat devices”.

VW chief executive at the time of the diesel scandal Martin Winterkorn stepped down soon after the news broke, while successor Matthias Mueller was hastily replaced earlier this year.

Both are suspected of knowing earlier than they have so far admitted about the cheating, meaning they failed in their duty to inform investors in the car giant about the financial risks.

US prosecutors also indicted Winterkorn last month, saying he knew of the company’s emissions cheating as early as May 2014 but decided to continue.

media_cameraVolkswagen chairman Herbert Diess rejected claims he knew about the cheating, and announced a goal of three million electric cars by 2025. Picture: Gallup/Getty Images

Present boss Herbert Diess has been accused of knowing about diesel cheating before it became public — an allegation rejected by the firm last month.

The scandal dubbed “dieselgate” has so far cost the world’s largest carmaker more than 25 billion euros in buybacks, fines and compensation, and the company remains mired in legal woes at home and abroad.

Other carmakers have also been forced to recall vehicles to fix manipulated software, although none has so far admitted to mass cheating as Volkswagen did.

Originally published as VW fined $1.5 billion in ‘Dieselgate’


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