Top VW execs indicted over stock manipulation

Volkswagen’s top managers have been charged in Germany with share-price manipulation over the €30 billion Dieselgate scandal.

Prosecutors in Braunswchweig (Brunswick) have charged Volkswagen Group Supervisory Board Chairman Hans Dieter Poetsch, CEO Herbert Diess and former CEO Martin Winterkorn over allegations that they deliberately failed to inform investors about the scandal soon enough.

An indictment filed in Brunswick yesterday accuses the three men of costing investors billions of euros by not giving them the time to react to the crisis until it was too late.

Volkswagen has hit back though, insisting Diess would remain in his role as CEO and would use all legal means to defend himself against the allegations.

Diess joined the company in July 2015 (the scandal broke in two months later) as Volkswagen brand CEO and insists it was not possible for him to foresee the consequences the diesel issues would have for the company or the markets.

Lawyer’s for Poetsch, who was the Volkswagen Group’s chief financial officer at the time of the scandal, said the allegations were “unfounded” and “implausible”

Volkswagen today issued a statement insisting it had fulfilled all of its obligations under German capital market law.

“The company has meticulously investigated this matter with the help of internal and external legal experts for almost four years. The result is clear: the allegations are groundless,” VW’s management board member for legal and integrity Hiltrud Werner said in a statement.

“If there is a trial, we are confident that the allegations will prove to be unfounded,” she said.

Volkswagen insisted it had cooperated with the investigators at every turn, as well as conducting its own investigation with American law firm, Jones Day.

“Based on its own extensive and independent investigations since autumn 2015, the Executive Committee still can, also from today’s perspective, not see that the capital market was deliberately not informed.

“In addition to the presumption of innocence in general, there are, among other things, also the following specific aspects that speak against the charge of market manipulation:

“The 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 Board of Management of Volkswagen AG could not foresee this change in the approach of the US authorities.”

The statement pointed out that the Volkswagen board’s timing on releasing the information was guided by US law firm Kirkland & Ellis.

“On the basis of Kirkland & Ellis’s advice, it was to be assumed until the publication of the Notice of Violation that, as was the customary practice until then, a mutually agreed solution would first be worked out with the US authorities and then presented to the public in a joint statement.

“Based on the findings available, the Executive Committee is therefore of the opinion that, prior to the publication of the Notice of Violation, the Board of Management of Volkswagen did not have sufficiently concrete indications that would have led to the obligation to inform the capital market immediately.“