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May 14, 2018

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Volkswagen new CEO may know of scandal

New Volkswagen chief Herbert Diess, so far widely seen as untarnished by the firm’s “dieselgate” emissions cheating scandal, may have known about the trickery earlier than previously thought, according to a media report yesterday.

Oliver Schmidt, a former VW manager jailed in the US over dieselgate, told the FBI he had briefed Diess and other executives about the cheating and the potential financial consequences almost one month before the group’s public admission in September 2015, newspaper Bild am Sonntag (BamS) reported.

A presentation shown at that August 25 meeting and obtained by BamS used the legal term “defeat device” — shorthand for a physical or software system that makes a vehicle appear less polluting under test conditions compared with real on-road driving.

VW’s admission on September 18, 2015 that it had fitted 11 million vehicles worldwide with the devices has so far cost it more than 25 billion euros (US$30 billion) in buybacks, fines and compensation, and the company remains mired in legal woes at home and abroad.

His presence at the briefing could mean Diess, who only joined the firm from BMW in July 2015, was more fully up to speed on the scandal than he has so far acknowledged.

Investors who lost money as VW stock plunged after the scandal broke see the question of whether executives failed to inform markets of potential financial harm to the company in a timely fashion as a key angle of legal attack.

German prosecutors are probing ex-CEO Matthias Mueller over such allegations.

Following the August 25 briefing, Diess was active in the firm’s response to “dieselgate” and regularly spoke with lawyers about it.


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