FRANKFURT (Reuters) – Volkswagen Chief Executive Herbert Diess told German daily Tagesspiegel that he did not fail in his duty to inform markets about the gravity of VW’s diesel cheating scandal in 2015, when he was still VW’s brand chief.
Prosecutors in Braunschweig, Germany are investigating whether VW executives including Diess and Chairman Hans Dieter Poetsch should have made a regulatory disclosure to inform investors about an emissions cheating scandal in summer 2015.
“I believe that the allegations made against me are unfounded. This is also the result after the viewing of files,” Diess told the paper. VW confirmed Diess had made the remarks.
VW has consistently denied wrongdoing by its executives and Diess, who has since been promoted to group chief executive, made the remarks after prosecutors granted defendants access to files which will be used in court.
Shareholders sued the carmaker citing a violation of disclosure rules, arguing that VW failed in its duty to inform investors about the financial impact of the scandal, which became public only after the U.S. Environmental Protection Agency (EPA) issued a “notice of violation” on Sept. 18, 2015.
A failure to make a regulatory disclosure could also amount to an offence of market manipulation.
VW shares lost up to 37 percent of their value in the days after authorities exposed VW’s illegal pollution levels but the carmaker said its managers could not have foreseen the financial scope of the scandal that has cost the carmaker more than 30 billion euros so far.
VW insists that the U.S. EPA’s issuance of the notice of violation was not in keeping with how U.S. authorities had handled similar cases involving other carmakers.
Because other carmakers had reached a settlement for emissions cheating without an EPA notice of violation, and because VW was at the time engaged in settlement talks, VW’s board did not see the need to inform investors, the carmaker said in a filing with the Braunschweig court.
VW had already made substantial provisions in late 2015 to cover other vehicle recalls, and because previous fines by U.S. authorities for similar violations were below $200 million, there was no need to issue an ad-hoc disclosure notice under German law, the carmaker said in the filing.
Volkswagen says board members at the time, including Diess and Poetsch therefore did not violate disclosure rules, according to the VW defence document filed with the court.
(Reporting by Edward Taylor; editing by David Evans)