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Volkswagen fined 1 billion euros by German prosecutors over emissions cheating

Reuters  |  BERLIN 

By Andreas and Jan Schwartz

BERLIN (Reuters) - Volkswagen was fined one billion euros ($1.18 billion) over diesel emissions cheating in what amounts to one of the highest ever fines imposed by authorities against a company, public prosecutors said on Wednesday.

The fine follows a U.S. plea agreement from January 2017 when agreed to pay $4.3 billion to resolve criminal and civil penalties for installing in diesel engines to cheat strict U.S. anti-pollution tests.

"Following thorough examination, accepted the fine and it will not lodge an appeal against it. Volkswagen AG, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome," it said in a statement.

The fine is the latest blow to Germany's auto industry which cannot seem to catch a break from the diesel emissions crisis. on Monday ordered to recall nearly 240,000 fitted with illicit emissions-control devices, part of a total of 774,000 models affected in as a whole.

prosecutors this week widened an emissions cheating probe into VW's luxury brand to include among the suspects accused of fraud and

The prosecutor's office in Braunschweig imposed the fine against on Wednesday for organisational deficiencies which failed to prevent "impermissible software functions" from being installed in 10.7 million between 2007 and 2015.

The fine did not address any civil claims or claims by vehicle owners, the prosecutor's office said in its statement. It does, however, end regulatory offence proceedings against Volkswagen, which the Wolfsburg-based carmaker said would help to settle further administrative proceedings against in

STRONG CASH POSITION

VW shares closed 0.1 percent higher at 159.78 euros.

VW is far from being out of the woods. The carmaker's new chief executive, Herbert Diess, and the group's are still being investigated by Braunschweig prosecutors for suspected market manipulation.

Poetsch, also of VW's majority stakeholder SE , is separately being investigated by prosecutors in over the same suspicions.

"Courts will now hardly be able to dismiss consumer complaints," said of platform MyRight which has mandated U.S. firm to pursue civil claims.

represents aggrieved VW owners and shareholders on both sides of the Atlantic.

Wednesday's fine was not included in the 25.8 billion euros of provisions that VW set aside for the diesel cheating scandal, and would hit earnings, analysts at said.

Volkswagen said it held a management board meeting to discuss the latest development in its emissions crisis with members of the supervisory board also being informed.

Further steps would be taken to overcome the diesel cheating scandal and to restore trust in the company, Diess said.

will update investors on Aug. 1 on the implications of the fine for the carmaker's cash position, alongside its second-quarter results, VW said.

"Paying out 1 billion euros is extremely painful but in the broader context it isn't a material number," said, citing VW's 24.3 billion-euro net cash position after the first quarter.

(Reporting by and Andreas Cremer; Editing by and Elaine Hardcastle)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, June 14 2018. 01:12 IST
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