German prosecutors are investigating whether Volkswagen AG chief executive Matthias Müller and other key board members and executives adequately disclosed financial liabilities related to the car maker's emissions-cheating scandal.
This is the first time Müller has been named in a criminal probe tied to the US finding that Volkswagen had used "cheat devices" in its diesel-engine cars.
Müller has presided over Volkswagen's operational and financial recovery, but the newly disclosed investigation threatens to complicate the auto maker's efforts to move forward, MarketWatch reports.
State prosecutors said on Wednesday that Müller, his predecessor Martin Winterkorn, and current Porsche SE chairman Hans Dieter Poetsch are under investigation on suspicion they intentionally withheld information from investors of Porsche SE ahead of a public "notice of violation" by the US in September 2015.
At the time, all the three executives were on the management board of Volkswagen and supervisory board of Porsche SE, a listed company in Germany that manages the 52-per cent stake in Volkswagen owned by the heirs of Beetle inventor Ferdinand Porsche. Müller also was the chief executive of sports car maker Porsche AG, a unit of Volkswagen, at that time.
Various Volkswagen executives and board members were briefed months before the notice that US environmental regulators had raised questions about the auto maker's diesel-emissions level. Neither Volkswagen nor Porsche SE disclosed that to investors, nor did they disclose any potential liabilities should the US decide to pursue a formal probe.
The Stuttgart probe isn't looking at whether Müller is suspected of playing a role in the diesel scandal itself. Volkswagen has admitted to a broad conspiracy to mislead regulators about the level of emissions produced by the car maker's diesel engines over several years.
Volkswagen has tried to draw a line under the scandal, in part by handing management to an untainted team led by Müller. The new probe could also add momentum to thousands of investor lawsuits in Germany that are seeking more than €8 billion in damages from the car maker.
The opening of an investigation by a prosecutor doesn't indicate that the people affected will be charged or convicted.
A spokesman for Porsche SE said the charge was unfounded and that the company fulfilled its obligations to inform financial markets in a timely fashion. The spokesman said Messrs. Müller and Pötsch won't comment on the investigation.
Volkswagen has earlier pleaded guilty in the US to conspiracy to commit fraud in connection with the emissions cheating and has agreed to pay nearly $25 billion in fines, penalties, legal fees and compensation for customers. Volkswagen admitted it installed software that tricked testing equipment into recording less emissions from its diesel-powered cars in the US than they were actually spewing out.