FRANKFURT/HAMBURG (Reuters) – Volkswagen <VOWG_p.DE> Chief Executive Herbert Diess was given a memorandum warning the carmaker might face legal action in the U.S. over the use of cheating software in cars just days before the scandal broke, a public broadcaster reported on Friday.
A former Volkswagen employee told the Braunschweig public prosecutor’s office that he wrote a so-called “one-pager” on Sept. 13, 2015, saying that Volkswagen had lost all credibility with U.S. authorities and was about to be charged, German public broadcaster NDR reported.
The employee further testified that he gave the document to Diess in person on Sept. 14, 2015, NDR said. U.S. regulators exposed VW’s cheating on Sept. 18, 2015.
Volkswagen has said the scandal has cost it more than $27 billion in penalties and fines.
Volkswagen’s senior management, which has denied wrongdoing, is being investigated by prosecutors in Braunschweig, near where Volkswagen is headquartered, to see whether the company violated disclosure rules.
Diess, who was VW’s brand chief at the time, became chief executive of Volkswagen Group in April this year.
The Braunschweig prosecutor’s office was not immediately available for comment on Friday. A spokesman for Volkswagen said in e-mailed comments that the group was only recently given access to documents in the case, adding this had so far not led to new findings.
He added it was inappropriate to use individual statements from the files and to comment on those, adding Diess, Volkswagen supervisory board chairman Hans Dieter Poetsch and former Volkswagen CEO Martin Winterkorn would not comment in light of the ongoing investigation.
German magazine Der Spiegel last week reported that Diess was present at a meeting on July 27, 2015 when senior engineers and executives discussed how to deal with U.S. regulators, who were threatening to ban VW cars because of excessive pollution levels.
In a defence document filed with the Braunschweig court in February and seen by Reuters, Volkswagen said that Poetsch, who was VW’s chief financial officer at the time, on Sept. 14, 2015 believed the potential financial risk from regulatory penalties tied to emissions would be about 150 million euros ($172 million).
VW said in its legal defence document that because the internal estimate was so small, VW felt potential costs could be covered by already accrued legal provisions, and that no additional disclosure about the potential fallout to shareholders was needed.
The company said that the documents unsealed by prosecutors have not changed its stance that management acted responsibly in its disclosure, and that it was not foreseeable at that time that U.S. authorities would impose an “unprecedented” fine.
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(Reporting by Jan Schwartz and Edward Taylor; Writing by Christoph Steitz; Editing by Jan Harvey)