The question of how involved Volkswagen AG top executives were in fraudulent emissions reporting widened Sunday with the company’s chairman being added to the list.
The German automaker said that Hans Dieter Pötsch, chairman of the supervisory board and former chief financial officer, is suspected by German prosecutors of violating securities laws. He’s been accused of failing to notify shareholders quickly enough of the financial risks of the scandal, which has cost the company several billion dollars.
While only one employee has been formally charged in the case, VW engineer James Liang, who pleaded guilty on U.S. charges, and several other potential suspects are being investigated in Germany.
Prosecutors and the automaker have previously disclosed that Martin Winterkorn, the former Volkswagen CEO, and board member Herbert Diess, have been under investigation for violating the company’s duty to disclose information that could affect the company’s share price. Winkerton took much of the initial heat for the scandal, and resigned days after the revelation of the U.S. investigation in September 2016. Diess remains a member of the management board.
Pötsch was elevated to chairman of the supervisory board in October 2015, just weeks after the U.S. EPA investigation started.
According to the New York Times, German prosecutors have been at work on plea agreements with other executives. This procedure so far has failed because of difference between German and American laws.
In the U.S., Liang agreed to cooperate with investigators and has not yet been sentenced by the judge.
There’s also been speculation that the expanding investigations could intensify criticism of the Porsche and Piëch families, descendants of Volkswagen’s founder, Ferdinand Porsche. Hans Dieter Pötsch has been closely associated with the family and is also chief executive of Porsche Automobil Holding SE, the holding company for the family’s shares in Volkswagen.
Other investors have criticized the families for poor oversight of the company, and helping to create the corporate culture that led to the wrongdoing.
The new investigation of Pötsch could also provide ammunition to investor groups and mutual funds that are suing VW in the U.S. and Germany. These cases are based on VW executives having awareness of the scandal, and failing to notify shareholders as required by law. VW may have to deliver billions more in settlements from these cases.