More VW executives knew about diesel fraud, newspaper claims

Volkswagen’s two leading managers, Matthias Müller and Dieter Pötsch, were informed about widespread diesel exhaust manipulation before US authorities revealed the practice last September.

The claim in Monday's Süddeutsche Zeitung raises fresh questions about VW's own version of the scandal – errant engineers and innocent executives – that has rocked the German car giant.

Previous leaks have already called into question former chief executive Martin Winterkorn’s claims of innocence, with reports suggesting he knew as early as May 2014 of problems with the EA 189 diesel motor, but kept quiet to dupe customers and environmental agencies.

Mr Winterkorn’s resignation after the revelations may no longer be sufficient damage limitation if the new bosses appointed in a complete corporate reshuffle were also aware of widespread exhaust-fixing.

Entire board

According to the

Süddeutsche

, the entire VW supervisory board were informed of the fraud in September 2015, including Mr Müller, now VW chief executive but then head of VW subsidiary

Porsche

.

The newspaper claimed Mr Müller kept quiet about the exhaust problem, as did Mr Pötsch, previously financial director and now head of the supervisory board.

The information is contained in a submission by state prosecutors in Brunswick, near the Volkswagen base in Wolfsburg, who are involved in the criminal case and a looming compensation case by VW investors.

The state prosecutor analysis said there was an “interest in keeping secret” the problematic diesel exhausts, and that the entire VW group board were informed of this before the “unexpected” revelations by the US environmental protection agency (EPA). The agency’s decision to publicise the “theoretical maximum fine” for such manipulations had caused investor “over-reaction”, according to a strategy paper commissioned by VW from a law practice. Then finance director Mr Pötsch reportedly forecast looming losses as a result of the scandal at €100 million.

‘Solution’

The paper, written before the EPA revelations, estimates that 500,000 US cars are affected by the scandal but assumed that it would be possible to reach a “solution” with the authorities that would not involve fines.

Executives hoped that “modest penalties” would be levied against the group, given how other car companies responsible for similar manipulations had been dealt with “without the rule breach becoming public”.