German Prosecutor Pulls VW Chairman Pötsch Into Disclosure Probe

Volkswagen (VLKAY) chairman Hans Dieter Pötsch has become embroiled in the German prosecutor's probe into whether company executives withheld key information as the emissions scandal of September 2015 broke.

The more-than year-long probe by the Braunschweig public prosecutor relates to whether executives manipulated the market by not disclosing the likely financial damage of the scandal in good time.

The prosecutor said when announcing the probe, that the "duty to disclose" could have arisen some time before Sept. 22, the date when VW first raised the emissions issue with investors.

VW Sunday came out in defense of its chairman, who was chief financial officer when the scandal erupted.

"Based on careful examination... the company reaffirms its belief that the Volkswagen board of management duly fulfilled its disclosure obligation under German capital markets law," VW said.

 The news came closely on the heels of a press report suggesting authorities in the U.S. have found that Audi cars carried emissions cheating software as recently as this May that differed to that found in the initial scandal.

The Bild am Sonntag reported on Sunday that the California Air Resources Board discovered that Audi cars contained software that could detect when cars are under test conditions and then conceal the true level of engine emissions.

 VW did not immediately respond to requests for comment.

VW investors appeared to take the news in their stride. The stock rose by 0.4% in the early hours of the European session, to trade at €119.1 ($130.1). They are down by 11.3% for the year to date.

VW agreed a $14.7 billion settlement with U.S. authorities in June, designed to fund the recall or buyback of affected cars and to enable compensation payments to customers. The settlement won U.S. court approval at the end of October. However, total costs relating to the emissions issue have been higher, with provisions for 2015 alone amounting to €16.2 billion.

The group has estimated that there are 11 million vehicles worldwide that have been fitted with the emissions cheating technology. Just 608,000 of these are in the U.S. and Canada, while about 8.5 million are in Europe.

VW has offered recalls and refits to customers elsewhere in the world but has so far declined to provide compensation to those outside the U.S. It has defended that decision by saying that emissions standards in the U.S. are much stricter than they are in Europe.

VW announced on Friday that it has received permission from the German transport regulator, the Federal Motor Transport Authority, to begin recalls and refits on a further 2.6 million vehicles involving the EA 189 TDI engines.

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