Volkswagen nears €10m settlement from former chief Martin Winterkorn

Volkswagen will recommend that its shareholders accept a settlement of approximately €10m from former boss Martin Winterkorn, according to people familiar with the matter.

The German carmaker announced in March that it would seek damages from Winterkorn, who was in charge of the group in the lead-up to the diesel emissions scandal in 2015.

The affair, in which 11m vehicles were found to be fitted with software that duped emissions tests, has cost VW more than €32bn in fines and legal fees to date.

Volkswagen’s decision to sue Winterkorn, who resigned as chief executive soon after the scandal came to light, came after a comprehensive report on Dieselgate by law firm Gleiss Lutz was delivered this year.

The report, commissioned by VW’s supervisory board, concluded that “negligent breaches of duty had occurred” in the company’s top ranks.

The world’s second-largest carmaker by volume subsequently accused Winterkorn of having had knowledge of the existence of unlawful software from 27 July 2015 but failed to “clarify the circumstances” of its use.

Additionally, VW said the former boss had “failed to ensure that the questions asked by the US authorities in this context were answered truthfully, completely and without delay”.

VW’s supervisory board also concluded that Rupert Stadler, the former Audi boss, breached his duties of care, as did four other managers. Stadler denies wrongdoing.

Winterkorn has rejected allegations of wrongdoing. Lawyers acting on his behalf said in March that in the run-up to Dieselgate, “he did everything necessary and omitted nothing that would have . . . prevented or minimised the damage caused”.

Over the weekend, settlement deals with all of those accused in March were discussed at a VW supervisory board meeting and the proposals will be put to shareholders next month, at the company’s annual general meeting.

The €10m figure for the settlement with Winterkorn was first reported by Business Insider. VW confirmed the supervisory board’s decisions but declined to comment on the precise figures of any settlement. 

Winterkorn is facing separate fraud charges and is due to stand trial in Germany this September. He has also been charged in the US but is unlikely to be tried there as Germany does not extradite its citizens. He denies the charges.

Stadler is currently being tried in Munich, in a case that is set to continue for several months.

At its meeting, VW’s board also voted to recommend an extension to the tenure of Hans Dieter Pötsch, who took over as the company’s chair soon after the scandal in 2015.

Last year, VW agreed to pay €9m in fines to close a case in which Pötsch, and current chief executive Herbert Diess, who joined VW in July 2015, were themselves accused of market manipulation in the run-up to the Dieselgate scandal.

German prosecutors had charged the duo for allegedly withholding information from shareholders on the existence of cheat devices, thus “unlawfully influencing the company’s share price”.

VW’s stock plunged more than 40 per cent after the scandal came to light, wiping billions of euros from its market value.

The company said the accusations against Pötsch and Diess were unfounded.