Published: Tue, June 19, 2018
Markets | By Erika Turner

Audi boss Rupert Stadler held in German diesel emissions probe

Audi boss Rupert Stadler held in German diesel emissions probe

The arrest of the CEO of Volkswagen's Audi division is another milestone in the German automaker's three-year scandal over diesel emissions cheating.

The move follows a search last week of Stadler's private residence, ordered by Munich prosecutors investigating the manager on suspicion of fraud and indirect improprieties with documents.

The devices were initially found in VW's cars, but its Audi subsidiary has also been embroiled in the scandal.

Munich prosecutors and Stadler himself were not immediately available for comment.

Audi used a statement to confirm its CEO has been "provisionally arrested", and highlighted the fact he's innocent until proven guilty - which he hasn't been, at this point. Stadler has been with Volkswagen-Audi since 1994 and has held the top managerial spot at Audi since 2007, two years prior to the alleged emissions-cheating activities.

Prosecutors concluded that Volkswagen failed to properly oversee the activity of its engine development department, resulting in some 10.7 million diesel vehicles with illegal emissions-controlling software being sold worldwide.

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Martin Winterkorn, the former chief executive officer of Volkswagen, was indicted in May by U.S. prosecutors.

Volkswagen Group and Audi confirmed Stadler's arrest this morning, adding that the presumption of innocence applied to Stadler's case.

Munish prosecutors reportedly made a decision to detain Stadler over fears of potential evidence tampering, according to CNN.

At 1040 GMT, VW shares were down 2.7 per cent at 156.70 euros, one of the biggest falls by a European blue-chip stock.

Stadler's arrest will raise tensions on VW's supervisory board, putting at risk a fragile truce between management, labour representatives and board members from the carmaker's home region of Lower Saxony. Oliver Schmidt, VW's emissions compliance executive in the USA, was arrested in Florida last year, and later sentenced to seven years in prison.

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