Germany fines Volkswagen $1.2 billion over diesel scandal
Fri Jun 15 2018
Mark Cooper (1261 articles)

Germany fines Volkswagen $1.2 billion over diesel scandal

 

Prosecutors in Germany have imposed a $ 1.2 billion fine on Volkswagen for rigging diesel engine emissions worldwide.

The €1 billion ($ 1.2 billion) penalty was announced Wednesday by public prosecutors and the company, which said it was hoping to turn a page on a scandal that has rocked the company and killed industry sales of diesel cars.

“It is one of the highest fines ever imposed on a company in Germany,” the prosecutor said in a statement.

Volkswagen(VLKAY) said it accepted the penalty, which related to inadequate oversight in the department that develops powertrains — engines and transmission systems.

The prosecutor found that the failings resulted in 10.7 million vehicles being sold to customers in the United States, Canada and worldwide “with an impermissible software function in the period from mid-2007 until 2015,” Volkswagen said in a statement.

“Volkswagen accepted the fine and it will not lodge an appeal against it,” it added. “Volkswagen, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome.”

Related: Volkswagen’s diesel scandal costs hit $ 30 billion

Volkswagen first admitted in 2015 it had rigged millions of diesel engines to cheat on emissions tests.

Diesel cars from Volkswagen and its Audi subsidiary cheated on clean air rules with software that made emissions look less toxic than they actually were.

The scandal sent its share price plunging, and trashed confidence among consumer and regulators in diesel technology. The episode has already cost Volkswagen over $ 30 billion in recalls, legal penalties and settlements.

The diesel scandal triggered protests and demands for vehicle bans.

Related: Germany’s second biggest city is starting to ban diesels

Wednesday’s decision does not affect civil proceedings pending before the courts, such as complaints brought by car buyers, and ongoing criminal investigations by German prosecutors against a total of 49 persons.

Still, the company said it hoped the fine would earn it a reprieve.

“Volkswagen assumes that such termination of the proceedings will also have significant positive effects on further active administrative proceedings in Europe,” it said in a statement.

Related: Volkswagen names new CEO in sudden shift

Martin Winterkorn, the former chief executive officer of Volkswagen, was indicted last month by US prosecutors. He was charged with wire fraud, and conspiracy to defraud American customers and violate the Clean Air Act.

Winterkorn was the ninth person charged by the US government over emissions cheating. Two former engineers have pleaded guilty.

 


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Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.

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