Former Head Of Audi Engineering Arrested Over Dieselgate Knowledge

Frankfurt am Main, Sept 28 (AFP) German prosecutors today said they had arrested a second employee of luxury carmaker Audi as part of a probe into parent company Volkswagen's emissions cheating scandal.

Volkswagen shares fell as much as 3% after the surprise disclosure early Friday, before clawing back some ground to trade down 1.5% at EUR136.3 in the early afternoon. The scandal has also raised questions and sparked investigations into emissions cheating at numerous other automakers, and has all but ruined diesel's reputation in the passenger auto market around the world.

In late 2016, Volkswagen pleaded guilty to conspiracy to defraud the USA government over the diesel scandal and agreed to pay almost $25 billion in fines, penalties and compensation, after it settled a number of civil lawsuits.

The charge will take a bite out of the financial results scheduled for release on October 27, the Wolfsburg-based company said, explaining that the make-good plan in response to the scandal is "proving to be far more technically complex and time-consuming" than anticipated.

Being the head engine developer for Audi up until 2007 places a lot of blame on Hatz, with Audi admitting in 2015 that its 3.0-litre turbo-diesel V6 had been fitted with illegal software to cheat its way through emissions tests.

The charge will bring the total "Dieselgate" bill past $30 billion, including legal settlements and regulatory fines. The fix is taking longer and some cars had to be worked on a few times.

"In the third quarter negative special items of circa €2.5 billion are expected to weigh on the operating result", the German carmaker said.

Volkswagen Group's former top engineer, Wolfgang Hatz, has been arrested by German prosecutors in connection with the automaker's diesel-rigging scandal, press reports said. He declined further comment at an event in suburban Detroit to announce a new longer warranty for VW vehicles. Volkswagen has said that it doesn't expect the costs of the program to affect earnings.

The arrest on Wednesday came after investigators searched two premises, a spokeswoman for the prosecution's office in the southern city of Munich told AFP.

  • David Armstrong