Audi CEO Rupert Stadler was arrested in connection with the diesel-cheating scandal, making him the highest-profile manager ensnared in the probe that’s engulfed the carmaker and parent Volkswagen for…
Article word count: 861
HN Discussion: https://news.ycombinator.com/item?id=17337682
Posted by crunchlibrarian
(karma: 302)Post stats: Points: 129 - Comments: 45 - 2018-06-18T12:27:12Z
Audi CEO Rupert Stadler was arrested in connection with the diesel-cheating scandal, making him the highest-profile manager ensnared in the probe that’s engulfed the carmaker and parent Volkswagen for almost three years.
Munich prosecutors investigating Audi’s role in the scandal said they arrested Stadler, 55, in the early hours of Monday at his house in Ingolstadt in Germany. Prosecutors asked for his arrest because of risk he may tamper with evidence, they said in a statement.
With the escalation of the case, German prosecutors who have been probing VW since September 2015 have finally broken through to the automaker’s higher ranks. Stadler’s arrest also raises new questions about a Volkswagen response that’s alternated between stonewalling and cooperation, while protecing its most senior managers.
The board reaffirmed Stadler’s role just last week, after authorities raided his house and named him a suspect in their probe of fraud and falsifying public documents in relation to selling diesel cars in Europe.
VW’s supervisory board plans to suspend Stadler and is set to name sales head Bram Schot as interim CEO, Handelsblatt reported, citing company sources.
Stadler is willing to be questioned later this week and his lawyers won’t challenge his arrest for now, prosecutor Stephan Necknig said. Investigators had indications Stadler, who hasn’t been charged, may influence witnesses in the probe, he said. Pre-trial detention can last as long as three months and can be extended while cooperative suspects usually leave custody much faster.
The arrest, which comes days after Volkswagen agreed to pay a 1 billion-euro ($1.2 billion) fine imposed by German prosecutors, throws into doubt the manager’s future at the helm of Volkswagen’s biggest earnings center. Stadler oversees a division that provides technology including engines to a number of the group’s brands -- including Porsche. Audi may name an interim head at a board meeting on Monday, according to a report in FAZ.
‘‘I don’t think VW can afford to leave Stadler in the position,” Juergen Pieper, a Frankfurt-based analyst at Metzler Bank, said by phone. “It’s actually a mystery to me that they left him in place for so long.”
Audi generates the most profit of any VW automotive brand
Source: Company annual report
Volkswagen declined 4.1 percent to 154.48 euros, the lowest since February, and traded 3.7 percent lower at 2:05 p.m. in local trading, extending losses this year to 5.2 percent.
VW’s controlling Porsche and Piech families have continued to back Stadler, who has led Audi since 2007 and sits on VW’s management board, despite a constant drumbeat of allegations ever since Audi got embroiled in the diesel scandal. Initially rejecting U.S. regulator claims it used illegal engine software, the carmaker has struggled to put an end to a drip-feed of negative diesel-related headlines.
Ulrich Weiss, a former top engineer at Audi’s engine development operation, told a German labor court last year Stadler had been aware of the illegal software earlier than he admitted. Weiss and Audi have since settled the legal dispute over his firing.
Stadler joined Volkswagen’s Audi unit in 1990, where he assisted the unit’s then-CEO Ferdinand Piech, the famed and feared later Volkswagen chairman. At Audi, he also worked alongside then-head of development Martin Winterkorn, who resigned as VW CEO days after the cheating scandal first erupted. The U.S. Justice Department in May issued a warrant for his arrest.
Even if he wasn’t directly involved in the diesel-engine manipulation, there has been an obvious lack of oversight at Audi that stretched over years, Pieper said.
“What is really disappointing as well is that 2.5 years after the diesel cheating came to light the brand continues to face scrutiny over software used in current models,” he said.
VW faces still legal proceedings in 55 countries and investigations into stock-market manipulation in its home market. The company has earmarked more than 27 billion euros in fines, buybacks and costs. Investors have accused the company of informing investors too late about the probe, a view the carmaker has contested.
Prosecutors in Munich, Stuttgart and Braunschweig are continuing their investigations of VW and its units. In April, Stuttgart authorities arrested a senior engine manager at the company’s luxury Porsche brand, after conducted raids at 10 sites as part of a long-running probe. Wolfgang Hatz, a former VW manager who joined Audi unit in 2001 and from 2007 to 2011 ran VW’s motor development, has been in custody in Munich since September. Giovanni Pamio, another Audi engineer, was arrested last year in Munich and released four month later after extensive questioning by prosecutors. The Munich probe now involves 20 people linked to Audi.
Two VW employees are currently serving prison terms in the U.S. James Liang, a veteran company engineer who pleaded guilty to conspiracy, was sentenced to 40 months in custody. Oliver Schmidt, VW’s compliance liaison with American regulators, pleaded guilty in August to one count of conspiracy to defraud the U.S. He received a 7-year sentence.
“The ongoing public bickering continues to undermine shareholder, customer and employee confidence in the business,” Evercore ISI analyst Arndt Ellinghorst wrote in a note. “Almost three years after the diesel scandal broke, it takes the police to take action against the Audi CEO.”
— With assistance by Hugo Miller
(Updates with prosecutor comment in second paragraph.)
HackerNewsBot debug: Calculated post rank: 101 - Loop: 83 - Rank min: 100 - Author rank: 83
Audi CEO Rupert Stadler was arrested in connection with the diesel-cheating scandal, making him the highest-profile manager ensnared in the probe that’s engulfed the carmaker and parent Volkswagen for almost three years.www.bloomberg.com