VW CEO Directly Drawn for First Time Into Diesel Scandal Probes

  • German prosecutors said to start probe over Porsche shares
  • Investigation said to be linked to VW emissions scandal

While dealing with Volkswagen AG’s legal woes over the last 1 1/2 years, Chief Executive Officer Matthias Mueller was able to claim that he was not personally caught up in investigations. That has now changed, potentially complicating his efforts to turn the page on the biggest scandal in the German automaker’s recent history.

Mueller, brought in at the height of the crisis in the fall of 2015 to replace then-CEO Martin Winterkorn, is under investigation by German prosecutors over whether he should have been faster in pushing to notify Porsche SE shareholders about the crisis, a person familiar with the matter said on Wednesday. Porsche SE is a holding company that controls VW, and Mueller at the time was the head of the Porsche brand and a board member at Porsche SE. A spokesman for Mueller said he wasn’t aware of the investigation.

Matthias Mueller on May 10.

Photographer: Krisztian Bocsi/Bloomberg

While other top executives, including Chairman Hans Dieter Poetsch, have already been drawn into previously announced probes looking into other aspects of the scandal, the investigation of potential manipulation of Porsche shares marks the first time that Mueller has been directly fingered. That runs counter to his message of being an untarnished agent of change, ready to leave no stone unturned in pursuing the truth over the scandal. Mueller is already under fire from investors after VW backed away from an original pledge to publish the full account of its internal investigation into the emissions cheating.

Another Blow

“It’s another blow for VW and the allegations could prove very serious for management,” said Vincenzo Longo, a strategist at IG Markets in Milan. “It’s clearly another reputational issue for the carmaker.”

Poetsch and Winterkorn, who held dual roles at Porsche SE, are also being probed by the prosecutors in Stuttgart, said the person, who asked not to be identified because the investigation has not yet been made public. Poetsch, Winterkorn and another executive at the automaker are already being investigated in a separate German probe over possible manipulation of VW stock linked to the crisis.

VW has maintained it informed markets properly, saying that it couldn’t have grasped the enormity of the case and that it would balloon into multi-billion crisis that would keep the company occupied for years and weigh so heavily on its stock in the immediate aftermath of the revelations.

VW is facing a barrage of investigations, lawsuits and customer complaints around the world after admitting in September 2015 that it rigged 11 million diesel vehicles to cheat on emissions tests. The scandal has cost it 22.6 billion euros ($24.6 billion) in fines and other expenses so far, and the final tally remains unclear.

A VW spokesman declined to comment, while a Porsche SE representative said he had no information about the probe. Lawyers for Poetsch and Winterkorn didn’t immediately reply to e-mails seeking comment.

“We believe Porsche SE fulfilled its obligations to comply with capital market rules,” said Albrecht Bamler, a spokesman for the holding company.

The Stuttgart probe comes after a complaint last summer over the matter from German financial regulator Bafin. Anja Schuchardt, a spokeswoman for the regulator, confirmed that the request was sent last year. 

Bafin also triggered the separate probe against Poetsch, Winterkorn and Herbert Diess over possible manipulation of VW stock. That investigation is lead by Braunschweig prosecutors. Poetsch, Winterkorn and Diess have denied any wrongdoing.

— With assistance by Christoph Rauwald

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