By on May 17, 2017

Matthias Müller, Image: Volkswagen AG/Wikimedia Commons (CC BY 3.0)

German prosecutors verified the launch of a formal investigation involving Volkswagen Group CEO Matthias Müller and chairman Hans Dieter Poetsch due to suspected market manipulation.

While we reported on the probe last week, Müller’s inclusion was highly unexpected. It was unclear what, if anything, officials had on the CEO and why they waited until now to add him to the growing number of upper-level executives under examination.

The Stuttgart prosecutor’s office stated on Wednesday the investigation was prompted by a request from market regulator BaFin in the summer of 2016. After spending some time gathering evidence, investigators began to believe executives deliberately postponed releasing information to investors about the scale of the scandal and didn’t adequately disclose its financial consequences.

VW Group maintains the leadership had complied with disclosure rules and executives were unaware of the scope of the emissions cheating scandal when it kicked-off. 

Stuttgart’s probe isn’t focused on the causes of the scandal itself, but at how the Porsche Automobil Holding SE board, including Müller, responded to it in those first few months. German law mandates companies to broadly and swiftly disclose any information that could affect decisions to buy or sell a company’s shares.

Müller is already taking heat from investors after VW refused to publish a report on the internal investigation into the emissions cheating, refuting an original pledge to share the findings in their entirety. Volkswagen claimed it simply wasn’t allowed to but these new allegations cast further doubt on the validity of that statement.

If he or any of the other board members are found to have dragged their feet or to possessed prior knowledge of the emissions scandal, shareholders burned by the stock plunge won’t be the only ones coming after them. In Germany, stock manipulation is fairly a serious crime and typically comes with a whopping fine and the occasional healthy jail sentence.

[Image: Volkswagen] [Source: Reuters]

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6 Comments on “German Prosecutors Confirm VW CEO as Focus of Official Investigation...”


  • avatar
    brettc

    Jim Lahey said it best – When you plant sh1t seeds, you get sh1t weeds.

    I think all of VW group management had to have known something. Making Matthias the VW CEO was just moving around the deck chairs.

  • avatar
    Lorenzo

    Matty started with Audi in the 1980s, then appointed to VW Group in 2007 by Winterkorn, then Porsche from 2010 to 2015 when he took over as VW CEO. The defeat device showed up in 2009 cars and was detected in 2015. It looks like Matty “may” have known something from 2007 to 2009 when the first cars with the defeat device were sold. Right now, the search for executive culprits is beginning to look like a witch hunt. It doesn’t help Matty that his first job at Audi was in the IT department, and that he’s one of those who knows about the mysterious “login”.

  • avatar
    Tosh

    If I leased an e-Golf, would that help drive VW into the ground faster? Just trying to help…

  • avatar
    SCE to AUX

    Once investigators seized the 100 TB of data during a raid, how is VW now communicating internally about the coverup?

    Windtalkers?

    • 0 avatar
      Lorenzo

      VW internal discussions were conducted using telepathy. It was one of the last projects VW worked on during the nazi era, and kept under wraps, to be used only for top-secret executive communications. Unfortunately, the execs made doodles while communicating, and the investigators confiscated the doodles, and hired code-breakers to figure out what they were discussing.


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