Audi boss arrested for fraud

Ivan Schwartz
June 18, 2018

Volkswagen's (VOWG_p.DE) supervisory board has nominated Bram Schot as interim chief executive at its luxury brand Audi following the arrest of Rupert Stadler, Germany's Sueddeutsche Zeitung said on Monday, without citing sources. The prosecutors' office said that Stadler had been seen by a judge "who has ordered him to be remanded in custody". It named Stadler among the suspects accused of fraud and false advertising.

Audi had no immediate comment regarding the arrest, and Stadler himself as well as Munich prosecutors were not immediately available for comment. Last week, prosecutors raided Stadler's residence in Munich as part of the investigation. VW's representative went on to mention the presumption of innocence has been applied.

The diesel scandal has so far cost the VW group more than €25-billion ($29-billion) in buybacks, fines and compensation, mainly in the United States where the cheating scam was first uncovered.

The probe, however, focuses only on cars sold in Europe which were believed to have emission manipulation devices installed which turned emissions control off during regular driving.

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Stadler's arrest is the most high-profile yet in the diesel gate crisis, which started when the Volkswagen group admitted in 2015 to equipping some 11 million diesels worldwide with "defeat devices" created to dupe pollution tests.

Just last week, VW agreed to pay a one-billion-euro fine to settle a probe by German prosecutors. Two are serving prison terms; Winterkorn and the others remained in Germany and are unlikely to be extradited. Stadler was under investigation for malpractice in the emissions cheating scandal at Volkswagen. He was charged with wire fraud and conspiracy to defraud American customers and violate the Clean Air Act.

Volkswagen declined 2.2 percent to 157.88 euros and traded 2 percent lower at 11:50 local trading, extending losses this year to 5.2 percent.

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