Business

Audi Chief Stadler Is Investigated in VW Emissions Scandal

Posted June 11, 2018 10:15 a.m. EDT

FRANKFURT, Germany — German prosecutors said Monday that they had opened a fraud investigation against Rupert Stadler, the head of Volkswagen’s Audi division, a widening of a long-running inquiry into the company’s emissions cheating.

Stadler, whose home was raided by investigators, is the first active member of Volkswagen’s management board to be identified as a suspect in the inquiry. The scandal, which involved cheating on diesel emissions, has already cost the company tens of billions of dollars and led to the arrest or imprisonment of several key executives.

Volkswagen has admitted that the software used to conceal excess diesel emissions was first developed at Audi, which Stadler has overseen since 2007. Audi diesels were also among some 11 million vehicles equipped with the software, which was designed to ensure they spewed lower levels of emissions during laboratory testing than during normal driving conditions.

Investigators have raided Audi offices and employees’ homes several times in recent months, and they have said that former members of the management board were suspects, although until Monday they had excluded Stadler.

Prosecutors said Monday that they were also investigating another member of Audi’s top management. They did not identify the person, in line with German rules designed to shield people who are not considered public figures. However, two people with direct knowledge of the investigation confirmed a report in the Bild newspaper that the second suspect was Bernd Martens, head of purchasing for Audi.

Audi said it was cooperating fully with investigators but declined to comment further. Volkswagen also declined to comment.

The investigation of Stadler, who has not yet been charged with any crimes, is likely to intensify criticism that Volkswagen has taken too long to replace executives who were part of the system that allowed the cheating to take place.

Stadler, 55, joined Audi in 1990 and was later chief of staff for Ferdinand Piëch, a legendary but feared former chief executive of Volkswagen. Piëch was credited with building the company into one of the world’s largest carmakers, but he was also blamed for creating a win-at-all-costs culture that nurtured the deception.

Piëch, who no longer exerts any direct influence at Volkswagen, is a grandson of Ferdinand Porsche, the designer of the Volkswagen Beetle. Stadler’s close connection with the Porsche family, which owns a majority of Volkswagen’s voting shares, may have helped him hold on to his position despite increasing pressure from prosecutors.

There was no indication Monday that Stadler would resign or be forced out as a result of the inquiry.

And while Volkswagen has long insisted that top management was not aware of the cheating, Stadler is the latest senior executive to be investigated in connection with the deception. Last month, the U.S. Department of Justice indicted Martin Winterkorn, the former chief executive of Volkswagen, on fraud charges in connection with the emissions deception. Winterkorn resigned in September 2015, days after the scandal came to light.

Stadler is, however, the first member of the management board still in office who has been identified as a suspect in the German fraud investigation. Stadler is also suspected of false advertising, Munich prosecutors said in a statement.