Dieselgate: Volkswagen fined €1 billion by German government

Irving Hamilton
June 14, 2018

A German court fined Volkswagen Group €1 billion ($1.2 billion) this week for its role in the 2015 diesel scandal.

The rigging of as many as 11 million diesel cars worldwide was uncovered by US authorities in September 2015 and triggered the deepest crisis in the manufacturer's history.

The scandal, which came to light in the United States in 2015 after VW admitted to circumventing the emissions control system there for diesel vehicles sold since 2009, has so far cost the German automaker $4.3bn (£3bn) in federal penalties over there.

"It is one of the highest fines ever imposed on a company in Germany", the prosecutor said in a statement.

Munich prosecutors this week widened an emissions cheating probe into VW's luxury brand Audi to include Chief Executive Rupert Stadler among the suspects accused of fraud and false advertising.

The company said it hopes paying the German fine will have a positive effect on other official proceedings being conducted in Europe against the automaker.

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"The Prosecutor's Office in Braunschweig ascertained a violation of supervisory duties", the prosecutor's office said in a statement, adding that the fine did not address civil claims or claims by vehicle owners.

"We must plan for interruptions to production in the third quarter", VW chief executive Herbert Diess told workers.

"Courts will now hardly be able to dismiss consumer complaints", said Jan-Eike Andresen of platform MyRight which has mandated US law firm Hausfeld to pursue civil claims.

VW said it held a board meeting to discuss the crisis, with members of the supervisory board also being informed.

Analysts at Evercore ISI said this fine would likely help end all criminal investigations against VW in Europe, but would not settle shareholder lawsuits.

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