Dieselgate: VW secures £ 248million settlement with former executives Car News

Volkswagen will receive € 288m (£ 248m) in compensation after reaching a deal with four former executives, including ex-CEO Martin Winterkorn and ex-Audi boss Rupert Stadler, over the diesel emissions.

The settlement is a major step in the German company’s attempt to extricate itself from the Dieselgate scandal, in which it admitted to using illegal software to rig U.S. diesel emissions tests. Volkswagen has so far paid more than £ 27.5 billion in fines, vehicle rectification and legal fees related to the scandal. Volkswagen and Porsche still face billions of shareholder claims.

Under the deal, Winterkorn will pay € 11.2m (£ 9.7m), Stadler will pay € 4.1m (£ 3.5m). Former Audi boss Stefan Knirsch will pay € 1million (£ 860,000), while former Porsche boss Wolfgang Hatz will pay € 1.5million (£ 1.3million). Volkswagen will also receive 270 million euros (£ 233 million) in compensation from D&O insurance.

Volkswagen initially blamed the emissions scandal on a small number of engineers. The deal with the four executives was reached following a review of liability claims conducted on behalf of VW’s supervisory board by law firm Gleiss Lutz.

The law firm’s investigation found that Winterkorn breached his duty of care as VW chairman by failing to “clarify the circumstances” of the original allegations and failing to ensure that questions from US authorities receive a truthful answer.

The report revealed that Winterkorn was not involved in the development or use of the circumvention devices, but was negligent in failing to clarify the circumstances of the use of the software after being made aware of it in July 2015. In particular, Winterkorn discussed neutralization devices. during a “damage roundtable” on July 27, 2015, during which several VW engineers told him that the use of the devices was, in their view, unjustifiable. The software gave him “specific indications of potentially illegal functions” in the software, with the report concluding that he should have “given top priority to pursuing those indications” after the meeting, but did not.

Notably, the report first confirmed that Herbert Diess, the current chairman of the Volkswagen Group, attended the “damage roundtable” in July 2015 where Winterkorn was involved in the defeat devices. But investigators decided that Diess had not breached any of his obligations because Diess had just joined the VW Group at the time of the meeting and was not responsible for resolving issues with US authorities. As a result, the report found “there was reason to believe” that the relevant VW bodies would examine the possibly illegal software.

The report revealed that Stadler had failed in his car duties by failing to ensure that diesel engines installed on Audi, Porsche and VW vehicles from 2016 onwards were not equipped with the illegal software.

The deal has yet to be approved at Volkswagen’s annual general meeting in July.

Volkswagen said former Audi chief Ulrich Hackenberg was “not ready to come to a deal”. Audi’s supervisory board has called for legal action against him.

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This notice was published: 2021-06-09 15:04:55

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