Volkswagen’s dieselgate scandal is back in the news as German prosecutors have indicted several executives for stock market manipulation.
Among those charged are CEO Herbert Diess, former CEO Martin Winterkorn and Hans Dieter Pötsch who is chairman of the company’s supervisory board. Prosecutors allege all three failed to inform investors about the scandal in a timely matter and this amounted to market manipulation.
In a statement, Volkswagen said they have cooperated with the Brunswick public prosecutor’s office and feel confident their own independent investigations have proved executives didn’t purposely try to misled investors.
Also Read: Former VW CEO Charged With Conspiracy Over Dieselgate Scandal
The Executive Committee of the Supervisory Board of Volkswagen AG also pointed to three things they describe as speaking “against the charge of market manipulation.” These include a “substantial decrease in the share price of the VW share after publication of the Notice of Violation on 18 September 2015 is due to the fact that the US authorities published their allegations completely unexpectedly during ongoing discussions with Volkswagen.” The company says they didn’t anticipate this, and were instead expecting to work out an agreement with US authorities before making a joint statement to the public.
Given this, Volkswagen believes they “did not have sufficiently concrete indications that would have led to the obligation to inform the capital market immediately.” The company also released a video of Hiltrud Werner, who is a member of the Volkswagen Group Board of Management responsible for Integrity and Legal Affairs, reading a statement where she says “If there is a trial, we are confident that the allegations will prove to be unfounded.”
Reuters reports Diess’ lawyers have said he will remain CEO and fight the allegations against him. They also claimed their client joined Volkswagen in July of 2015 and he couldn’t have foreseen the consequences on the emissions cheating scandal.
While Volkswagen contends they did nothing wrong, the U.S. Department of Justice charged Martin Winterkorn with conspiracy and wire fraud last year. At the time, the government said Winterkorn was told about the emissions cheating in May 2014 and, again, in July 2015. Despite being shown a PowerPoint presentation detailing how Volkswagen was deceiving U.S. regulators and the consequences of getting caught, executives pushed to get approval to sell 2016 model year vehicles in the United States without revealing the existence of defeat devices.
However, the house of cards collapsed when a Volkswagen employee, in “direct contravention of the instructions from his superiors,” revealed the company’s 2.0-liter TDI engines were using defeat devices. Less than a month later, Volkswagen admitted to using defeat devices.