German prosecutors have opened investigations into Volkswagen AG’s just-resigned CEO Martin Winterkorn and other VW executives on allegations of fraud due to the presence of emissions-cheating software in its diesel cars.
The criminal probe will attempt to ascertain who was responsible for allowing the world’s largest carmaker to equip 11 million diesel-run vehicles with ‘defeat devices’ designed to subvert U.S. Emissions testing. This scandal, which was sparked by tests performed by researchers at West Virginia University, has turned into the greatest crisis befalling the 78-year-old German company.
“We are investigating Winterkorn and other responsible people,” the spokeswoman for the prosecutor’s office told The Wall Street Journal. “We are pursuing every possible lead.”
Since the scandal started, $25.7 billion has been wiped out from Volkswagen’s market value. The company is also setting aside $7.3 billion to deal with the issue, which could come in the form of recalls, retrofitting vehicles with more compliant software and hardware, and combating a potential mountain of lawsuits.
The company has since appointed its head of the Porsche brand, Matthias Müller, to replace Winterkorn. It has also fired several leading executives, has moved to decentralize decision-making, and will be addressing deep-seated cultural issues. “My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation,” Mueller said.
