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German prosecutors charge former Volkswagen CEO with false testimony

The charges are related to a 2015 scandal when VW admitted it had equipped around 11 million vehicles with devices capable of producing fake carbon dioxide emission readings during tests.

AP

Martin Winterkorn was Volkswagen’s chief executive for eight years before resigning shortly after the emissions deception was exposed in late 2015, March 12, 2015

Prosecutors have charged former Volkswagen chief executive Martin Winterkorn with giving false testimony to the German Parliament when he said he was unaware of the carmaker’s diesel emissions cheating before it became public.

Volkswagen is struggling to draw a line under its biggest ever corporate crisis in which it admitted using illegal software to rig US diesel engine tests. The “dieselgate” scandal has cost the German carmaker more than $39 billion in fines, refits and legal costs.

The scandal erupted in 2015, when VW admitted that it had equipped around 11 million vehicles with devices capable of producing fake carbon dioxide emission readings during tests, even though actual emissions could be up to 40 times higher.

“In his testimony, the accused falsely claimed to have been informed of the defeat devices only in September 2015,” Berlin prosecutors said in a statement on Wednesday, confirming an earlier report in Bild newspaper.

“According to the indictment, he had since May 2015 been aware that the engine control software of some VW vehicles had been equipped with a function to manipulate the exhaust values in testing,” the prosecutors added.

A spokesman for Winterkorn, who was Volkswagen CEO between 2007 and 2015 when he left the company, did not immediately respond to a request for comment.

Volkswagen said in late March it would claim damages from Winterkorn for breaching his duty of care by failing to fully and swiftly clarify circumstances behind the use of unlawful software functions in some diesel engines.

Reaching a settlement

Volkswagen on Wednesday said it had agreed with former executives, including Winterkorn, to settle claims related to the dieselgate scandal in a $351 million (288 million euro) deal.

The agreement, which consists mainly of a $329 million (270 million euro) payment from directors' and officers' liability (D&O) insurances, also includes a settlement with former Audi boss Rupert Stadler.

It still needs to be approved at the company's annual general meeting on July 22.

Volkswagen in late March said it would claim damages from Winterkorn and Stadler on account of breaches of duty of care under stock corporation law.

Volkswagen concluded that Winterkorn had breached his duty of care by failing to fully and swiftly clarify circumstances behind the use of unlawful software functions in some diesel engines sold in the North American market between 2009 and 2015.

As part of the deal, Winterkorn and Stadler will pay $13.6 million (11.2 million) and $5 million (4.1 million euros), respectively. Former Audi board member Stefan Knirsch agreed to settle for $1.22 million (1 million euros), and ex-Porsche AG board member Wolfgang Hatz for $1.83 million (1.5 million euros), VW said.

The settlement comes as Berlin prosecutors on Wednesday said they had brought separate charges against Winterkorn for giving false testimony to the German Parliament when he said he was unaware of the carmaker's diesel scandal before it broke.

France's Peugeot, now part of the Stellantis group following its merger with Fiat, is also under investigation over suspected emissions cheating.