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Abu Dhabi, UAESunday 22 July 2018

Audi chief Rupert Stadler in custody over 'dieselgate' scandal

Munich prosecutors arrested the manager in the Bavarian capital because of risk he may tamper with evidence amid ongoing fraud investigation

Audi chief Rupert Stadler has been arrested in diesel emissions inquiry on fears he may manipulate evidence. Sean Gallup/Getty 
Audi chief Rupert Stadler has been arrested in diesel emissions inquiry on fears he may manipulate evidence. Sean Gallup/Getty 

German authorities have taken Rupert Stadler, chief executive of Volkswagen’s Audi unit, into custody on Monday, making him the highest-profile arrest in the group’s diesel-cheating probes.

Munich prosecutors, who have been investigating Audi’s role in the 2015 scandal, confirmed they arrested the manager in the Bavarian capital because of risk he may tamper with evidence, according to an emailed statement on Monday.

Volkswagen, which last week agreed to pay a fine of €1 billion (Dh4.26bn) imposed by German prosecutors, confirmed the arrest, according to Bloomberg.

Mr Stadler's arrest comes after German prosecutors this month widened an emissions cheating probe to include him among the suspects accused of fraud and false advertising, Reuters reported.

Almost three years after Volkswagen admitted to falsifying US diesel emissions tests, the Munich public prosecutor's office said it was now probing 20 suspects, and had on Monday searched the apartment of Mr Stadler and one other board member.

That news came after Germany's Bild am Sonntag reported up to 1 million Daimler cars had been found to contain illegal emissions devices, showing how the fallout from Volkswagen's scandal continues to dog the industry.

"Since May 30, 2018 the chairman of the board of Audi Prof Rupert Stadler as well as a further member of the management board are now named suspects," the Munich prosecutor's office said at the time.

The investigation could trigger a leadership crisis at Audi and its parent Volkswagen where Mr Stadler was in April elevated to the post of head of group sales.

Mr Stadler has been under fire ever since Audi admitted to using cheating software in November 2015 - two months after Volkswagen - but has enjoyed backing from members of the Porsche and Piech families who control Volkswagen and Audi.

Before becoming Audi CEO in 2007, Mr Stadler was a confidant of, and former assistant to, then-Volkswagen chairman Ferdinand Piech, the scion of the group's controlling Piech clan.

Audi, the biggest contributor to Volkswagen's profit, admitted in November 2015 its 3.0 litre V6 diesel engines were fitted with a device deemed illegal in the United States that allowed cars to evade emissions limits.

In March, Audi's 20-strong supervisory board recommended that shareholders endorse Mr Stadler as chief executive even as prosecutors raided Audi to investigate who was involved in the use of any illicit software deployed in 80,000 VW, Audi and Porsche cars in the United States.

Audi said last month it had discovered emissions-related problems with a further 60,000 cars.

Nearly three years on from the scandal, VW faces a multitude of probes both in Germany and abroad, with legal proceedings in 55 countries pending and investigations into stock-market manipulation in its home market, according to Bloomberg. The company has earmarked more than €27bn in fines, buybacks and costs. Investors have accused the company of informing investors too late about the probe, a view the car maker has contested, saying it couldn’t have known the issue would balloon as it did.