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Leonid Bershidsky

Is Something Rotten in the State of Corporate Germany?

The manner of Martin Winterkorn's resignation calls into question German corporate governance practices.
Weasel words.

Weasel words.

Photographer: Alexander Koerner/Getty Images

As it accepted the resignation of Chief Executive Martin Winterkorn on Wednesday, the executive committee of Volkswagen's supervisory board praised his "towering contributions" to the company that stands to lose much of its $37 billion cash stash making amends for major fraud committed on Winterkorn's watch. Such graciousness is a German tradition, and it raises the question whether there's something fundamentally wrong with the country's corporate establishment. 

In its statement, the committee declares as fact that Winterkorn "had no knowledge of the manipulation of emissions data." There was no way to establish that in the short time since VW's use of special software to cheat emissions tests came to light. The board, which in April backed Winterkorn in a battle with company patriarch Ferdinand Piech, must have taken the chief executive's world for it. That is amazing leniency on the part of a group of people charged with looking out for shareholders' interests, given that VW's stock is down 28 percent since September 18.