German prosecutors in Stuttgart are dropping an investigation into former Volkswagen CEO Martin Winterkorn and any role he may have played in manipulating the market by covering up the automaker’s emission’s scandal.
Winterkorn was being investigated for possibly delaying the release of the information about the emissions cheating software used to beat U.S. emissions testing for diesels. Once the information was released, VW took a massive hit to its earnings, stock price and reputation. In fact, it’s still paying for it in the U.S. Overall, the scandal has cost the company more than $32 billion.
Officials elected to shut down the query because a criminal investigation in the city of Braunschweig is ongoing and would levy stiffer penalties against the former CEO, who resigned in 2015, if he’s found guilty of the criminal charges, Reuters reported. Winterkorn, through an attorney, maintains he’s innocent, which he has done from the outset.
Winterkorn is the latest senior VW executive to avoid serious prosecution by German authorities in their investigation into the scandal.
In August, prosecutors agreed to end dieselgate-related investigations into former Chairman Hans Dieter Poetsch and former VW Chief Executive Matthias Mueller in exchange for paying fines. Porsche Automobil Holding SE agreed to pay a 1.5 million-euro, or $1.8 million, fine in exchange for calling off the queries.
The two were being investigated for failing to warn investors about the growing fallout of VW’s diesel emissions scandal. At the time, investigators said they would continue looking into Winterkorn’s role in the issue.
Prosecutors essentially did the same thing in May when they dropped charges against Poetsch and the company’s current chief Herbert Diess after the company agreed to a fine of 9 million euros, about $10 million.
In addition to their roles at Volkswagen, both Poetsch and Mueller were members of the board of Porsche Automobil Holding SE, the family-owned company which has 53.3% voting stake in Volkswagen AG.
Poetsch has long maintained that he was unaware of the cheating device used by VW engineers to skirt emissions testing until just before the brewing scandal was revealed by U.S. authorities in September 2015. This is in spite of media reports that he knew as early as June 2015.
German newspaper Bild am Sonntag claimed in 2018 that claims that Poetsch reviewed a presentation dubbed “Sacramento” dated June 24, 2015, which said the company was violating U.S. emissions rules and the company may also have breached its supervisory obligations. He and the company denied the claims.