Dieselgate: German car industry bosses charged with ‘market manipulation’

German prosecutors said Tuesday they had charged Volkswagen chief executive Herbert Diess, former boss Martin Winterkorn and supervisory board chief Hans Dieter Pötsch with "market manipulation" relating to the car giant's "dieselgate" scandal.

Dieselgate: German car industry bosses charged with 'market manipulation'
From left to right, Martin Winterkorn, Dieter Pötsch and Herbert Diess. Photo: DPA

The three are “accused of deliberately informing capital markets too late about the significant payment obligations in the billions arising from the so-called 'diesel scandal', thereby illegally influencing the share price,” prosecutors in the north German city of Brunswick said in a statement.

READ ALSO: Five things to know about Germany's Dieselgate scandal

Tuesday's move means the trio are on the threshold of a full trial, like Rupert Stadler, former head of Volkswagen subsidiary Audi, who was charged by Munich prosecutors in July.

At issue is the sprawling 12-brand Volkswagen group's 2015 admission to manipulating 11 million vehicles worldwide to fool regulators' emissions tests.

Motor control software activated systems to reduce output of harmful nitrogen oxides (NOx) only under lab conditions, while allowing them to exceed legal limits by up to 40 times in real driving.

Diess, Winterkorn and Pötsch — who all sat on the executive board in 2015 — failed to inform investors of the cheating as soon as they knew about it and the massive financial risks for the company, “against their legal obligation,” prosecutors said.

Diess has run VW since April 2018, but joined the board as Volkswagen brand chief in 2015.

In early September, he told AFP at the Frankfurt IAA car show that there was “no question” he would step down if charged.

Winterkorn was at the controls from 2007 to 2015, stepping down soon after
the scandal broke.

In April, he was charged with serious fraud, unfair competition and breach of trust by prosecutors in Brunswick, alongside four other suspects.

Photo: DPA

The dieselgate scandal shook Volkswagen to its foundations, and with it Germany's flagship car sector, a pillar of the economy that employs around 800,000 people.

It has cost VW alone more than €30 billion in fines, legal costs and compensation payments to car owners — the vast majority in the United States.

At home, Audi, Porsche and the Volkswagen brand have paid a total of €2.3 billion in fines for negligence in failing to stop the cheating — the only way to punish the companies themselves in German law.

READ ALSO: German prosecutors raid Porsche in corruption probe

Still on the boil are multiple inquiries looking to determine who within the companies was responsible for the cheating.

Brunswick prosecutors' probe has had almost 40 people in its sights.

Neither have investors or car owners been idle.

Shareholders have launched a massive joint lawsuit demanding €9 billion of damages, while some 400,000 drivers' cases have been bundled into a trial that will begin on September 30th.

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‘Infringement on air quality’: EU court slams Germany for pollution in cities

The EU's top court ruled on Thursday that Germany continually violated upper limits for nitrogen dioxide, a polluting gas from diesel motors that causes major health problems, over several years.

'Infringement on air quality': EU court slams Germany for pollution in cities
Cars sit in traffic in Stuttgart's Hauptstätter Straße in July 2020. Photo: picture alliance/dpa | Sebastian Gollnow

Germany infringed air quality rules “by systematically and persistently exceeding” the annual nitrogen dioxide limit in 26 out of 89 areas from 2010 to 2016, the European Court of Justice (ECJ) said in its ruling.

The European Commission, the EU’s executive arm, referred the matter to the ECJ in 2018 after almost a decade of warnings that went unaddressed.

The decision against Europe’s top economy echoes a ruling targeting France in October 2019 after the commission stepped up its anti-pollution fight in the wake of the so-called “Dieselgate” scandal that erupted in 2015 with revelations about Germany’s Volkswagen.

The motors caught up in the scandal — in which automakers installed
special emission-cheating devices into their car engines — are the main emitters of nitrogen oxides that the European Environment Agency says are responsible for 68,000 premature deaths per year in the EU.

READ ALSO: Five things to know about Germany’s dieselgate scandal

Nitrogen dioxide is toxic and can cause significant respiratory problems as one of the main constituents of traffic-jam smog.

Under EU rules, member countries are required to keep the gas to under 40 micrograms per cubic metre — but that level is often exceeded in many traffic-clogged European cities.

The judgement opens the way to possible sanctions at a later stage. However the air quality throughout much of Germany has improved in the last five years, particularly during the shutdowns in the pandemic.

The environment ministry said that 90 cities exceeded national pollution limits in 2016 — the final year covered by the court ruling. By 2019, the number had fallen to 25 and last year, during the coronavirus outbreak, it was just six.

The case involved 26 areas in Germany, including Berlin, Hamburg, Munich and Stuttgart as well as urban and rural areas in North Rhine-Westphalia, Mainz, Worms/Frankenthal/Ludwigshafen and Koblenz/Neuwied.

“Furthermore, Germany infringed the directive by systematically and
persistently exceeding, during that period, the hourly limit value for NO2 in two of those zones” — the Stuttgart area and the Rhine-Main region.