Business VW pays millions for the CEO's discharge: free purchase...

VW pays millions for the CEO’s discharge: free purchase instead of acquittal? | Industry News automobile

It is not an acquittal, and certainly not a first class. However, VW boss Herbert Diess and the chairman of the supervisory board, Hans Dieter Pötsch, are now spared recurring, unpleasant appointments in court. The criminal proceedings for possible market manipulation at the Braunschweig Regional Court had been terminated before the trial began with a money charge.

Volkswagen has transferred 9 million euros – each 4.5 million per person – to the state of Lower Saxony. A public legal argument about whether the two of them may be informing investors about the billion dollar risks too late in the context of the 2015 diesel affair is thus off the table.

But a number of points remain open. And, like in other proceedings that the long shadow of “Dieselgate” – the deepest crisis in the automotive industry – brought with it, there is no real transparency about the processes and information channels around the 2015 scandal year.

This week the surprising news came from the supervisory board of the German auto giant. Volkswagen had agreed with the court on the payment requirement, “welcoming” this solution. Even legal advisors now see themselves confirmed in an assessment that they already made after the indictment against the top management last September: the allegations that Diess and Pötsch had not put the financial markets in the picture five years ago are unfounded.

The Braunschweig judges then took their time with an explanation. In the afternoon, the 16th Chamber of Commerce confirmed that the 9 million euros had flowed. The termination was agreed in the context of the non-public interim proceedings.

The reasons for the step are provisions of the Code of Criminal Procedure. According to the lawsuit, the prosecution and the accused are allowed to stop proceedings if the conditions and instructions are “suitable to eliminate the public interest in law enforcement and the seriousness of the guilt is not inconsistent”. If the requirements – here: the payment of millions – are observed, “the deed can no longer be prosecuted as an offense”. The public prosecutor’s office in Braunschweig did not comment on the subject.

The money does not come from Diess and Pötsch, but from the VW company. After “extensive examination and consideration”, the Supervisory Board decided to release the two from the requirement, it said.

It is in the interest of the group that the procedure ends – also because it could be used to settle administrative offenses against VW. The Supervisory Board also reaffirmed its belief that Diess and Pötsch had not violated any obligations. Some observers also wondered how it should be possible for a VW boss to constantly have to go to court in the event of a lawsuit and not be able to control the company full-time.

After the emissions manipulation in several million diesel vehicles became known in September 2015, Volkswagen’s share price temporarily fell. Investors are demanding compensation from the group that did not warn them in good time. The OLG spokeswoman said that the decision by colleagues from the district court had no direct impact on the model procedure for investors at the Higher Regional Court (OLG) in Braunschweig.

Prime Minister Stephan Weil, representative of the State of Lower Saxony as the second largest VW owner on the Presidium of the Supervisory Board, sees the end of the procedure as a positive step for the company. “It is an advantage for Volkswagen that this question has now been finally clarified,” said the SPD politician. He emphasized that it was a unanimous decision between the judiciary and the procedural actors: “In agreement with all those involved in the process, the district court has terminated the proceedings against conditions.”

IG Metall – also an influential force at VW and represented by union chief Jörg Hofmann on the control committee – did not want to get involved in the process termination. The Porsche and Piech families, as majority shareholders, supported the decision: They “support and welcome the decision that has now been made”, as the holding company Porsche Holding explained.

In the interim process – after indictment, before trial or dismissal – courts can weigh the prospect of a main trial based on the likelihood of different outcomes. With regard to the attitude at Diess / Pötsch, there was also criticism of the decision. The business ethicist Ulf Pose said at the station n-tv that in the case of VW the connections to politics are close.

The former VW boss Martin Winterkorn was also indicted in Braunschweig for alleged market manipulation. This process could also soon end against conditions, was heard from his environment. The court officially declared that it was “still in the non-public interim proceedings”. Winterkorn is also charged with serious fraud related to the diesel affair. Here, too, the indictment is not yet admissible – however, the court reportedly raised doubts about the validity of some of the allegations.

Winterkorn’s lawyer Felix Dörr emphasized that his client “had no early knowledge of the targeted use of prohibited engine control software in US diesel cars”. But who knew what exactly when? This is still unclear in many ways. (dpa / apa / red)

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