November 09, 2016

Volkswagen Emissions Scandal Widened: Prosecutors Probe Chairman


On November 06, Volkswagen (VW) stated that a probe into suspected market manipulation by managers at VW has been widened by German prosecutors to include the company’s Supervisory Board Chairman Hans Dieter Poetsch. Poetsch was the finance chief of VW when the issue on cheating the United States diesel emissions tests became public.

VW admitted that to deactivate pollution controls, it installed software in more than 11 million diesel vehicles; this affected its global business, damaged its reputation, and prompted the departure of Chief Executive Martin Winterkorn.

Another car manufacturer called Audi was also found to have added a cheat software device in its vehicles. However, the device added by Audi was not the same as the one that triggered last year's diesel emissions scandal at VW. Audi has declined to comment on the report.

The Braunschweig prosecutor's office first announced the market manipulation probe in June. This probe targeted former CEO Winterkorn and VW Brand Chief Herbert Diess for suspected market manipulation related to the emissions scandal.

The prosecutor's office said that its investigation focused on evidence that VW's duty to disclose possible financial damage from the emissions test cheating may have arisen before September 22, 2015, when the car manufacturer publicly admitted its wrongdoing.

VW said that "Based on a thorough examination by internal and internal legal experts, the company reaffirms its belief that VW's management fulfilled its duties to inform the capital market." VW also said that the company and Poetsch would fully support the prosecutor's office in its investigation.

Software details

Audi admitted in 2015 that it used illicit emissions-control devices in approximately 85,000 3.0-litre diesel engines, and this year, it has set aside $838 million to cover related costs.

It has been reported that the California Air Resources Board (CARB) discovered cheating software in an automatic transmission vehicle manufactured by Audi in 2016. However, CARB declined to comment on the report. The software decreased carbon dioxide emissions by detecting whether a car's steering wheel was turned as it would be in the case of driving on a road. If the steering wheel was not turned, the software turned on a gear-shifting programme that produced less carbon dioxide, thus allowing the car to meet the emissions criteria. If the wheel was turned by more than 15°, the software would turn off. There has been no report yet if other performance criteria improved when the software turned off.

Notably, Audi stopped the use of the software in May 2016, just before CARB discovered the manipulation in an older model. Affected transmissions have been reported to be used in many vehicles; Audi had suspended several engineers in connection with this matter.

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