VW CEO and chairman charged with market manipulation by German court in relation to 2015 emissions scandal
- Volkswagen CEO Herbert Diess and chairman Hans Dieter Poetsch were charged with market manipulation by a German court, according to an indictment filed Tuesday.
- The case alleges the two misled investors by not telling them about the company's 2015 diesel emissions scandal early enough.
- Former CEO Martin Winterkorn was also charged in the indictment. Winterkorn left the automaker just days after news of the scandal broke.
- The criminal case may harm VW's odds at winning an investor lawsuit, with shareholders seeking more than 9 billion euros in damages related to the engine-testing scandal.
- VW shares fell as much as 3% on the news.
- Watch Volkswagen trade live here.
Volkswagen CEO Herbert Diess and chairman Hans Dieter Poetsch were charged with market manipulation in Germany, according to an indictment filed Tuesday.
The lawsuit alleges the two failed to tell investors early enough about the emissions-testing scandal that rocked the automaker back in 2015. Former VW CEO Martin Winterkorn was also charged in the indictment.
Shares fell as much as 3% in European hours on news of the indictment.
"The company has meticulously investigated this matter with the help of internal and external legal experts for almost four years. The result is clear: the allegations are groundless," VW management board member for legal and integrity Hiltrud Werner told Bloomberg. "If there is a trial, we are confident that the allegations will prove to be unfounded."
Volkswagen shares plummeted more than 60% in September 2015 after the company admitted it used software to cheat diesel emission tests in more than 11 million vehicles. VW has already paid roughly $33 billion in costs related to the incident, according to Bloomberg.
The indictment may also harm VW's odds at winning an investor mass lawsuit, with shareholders asking for more than 9 billion euros in damages related to the scandal. The automaker has already accounted for 5.5 billion euros worth of emissions-scandal costs, with 3.4 billion euros reserved for investor lawsuits, chief financial officer Frank Witter said in May.
The new indictment must now be reviewed by a regional court before it's decided whether the men will be tried. The review is set to take months, making a possible trial likely to start no sooner than 2020, according to Bloomberg.
Winterkorn left the automaker just days after scandal went public. He was charged with aggravated fraud by a German court in April and could face up to ten years in prison if convicted. Winterkorn has denied any wrongdoing.
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