Audi CEO arrested over diesel cheating scandal

VW has backed and promoted Rupert Stadler despite calls for his resignation

Audi chief executive Rupert Stadler was arrested on Monday for his alleged role in the Volkswagen Group’s diesel cheating scandal

Audi chief executive Rupert Stadler was arrested on Monday for his alleged role in the Volkswagen Group’s diesel cheating scandal

 

Audi chief executive Rupert Stadler is expected to spend at least two days and nights in police custody until prosecutors quiz him about what he knew about the diesel emissions scandal at VW’s luxury car subsidiary.

Mr Stadler was arrested at his home in Munich, 80km south of Audi’s Ingolstadt base, before 7am on Monday morning as he was preparing to head to a VW supervisory board meeting.

The meeting went ahead in Wolfsburg without the 55 year-old, amid speculation that the VW board will cut loose the Audi manager after nearly a two per cent drop in the VW share price on the Frankfurt DAX.

Volkswagen’s supervisory board has nominated Bram Schot as interim chief executive at its luxury brand Audi following the arrest, Germany’s Sueddeutsche Zeitung said on Monday, without citing sources.

State prosecutors in Bavaria said Mr Stadler was arrested, a week after a raid on his home, out of concern he would destroy evidence and because of a “danger of collusion”.

“There were concrete indications that persons and fellow suspects should be influenced,” said Mr Stephan Necknig, of the Munich state prosecutor’s office.

Email trail

Prosecutors indicated Mr Stadler had met with other suspects in his home after last Monday’s raid, with further meetings planned for this week. The prosecutors feared they were colluding to stitch together their own narrative of the diesel scandal.

The prosecutors said Mr Stadler had indicated he was willing to be questioned by police, likely to happen by Wednesday at the latest. It is unlikely he will be released on bail before then.

Mr Stadler and another director of Audi stand accused of constructive false certification: bringing onto the market vehicles they knew failed to meet emissions certificates.

According to the Bild am Sonntag newspaper, investigators have discovered an email showing that Mr Stadler was informed in December 2015 about diesel manipulation in Audi models. Other unnamed employees told Bild that Mr Stadler knew about the manipulation - and cover-up - since 2012.

A VW spokeswoman confirmed on Monday that Mr Stadler had been arrested and that the company’s supervisory board would discuss the matter.

“The principle of the presumption of innocence continues to apply to Mr. Stadler,” the spokeswoman added.

Growing pressure

Pressure has been growing on Mr Stadler in recent months, in particular since the appointment of new VW chairman Herbert Diess. He has promised a clean sweep across the VW group, and recent meeting with federal transport minister Andreas Scheuer, vowed to increase the pressure on Mr Stadler to conclude Audi’s in-house investigation. Last week Audi insisted this probe of its products had reached a “decisive phase” and that it would present results by July to Berlin.

Until now Mr Stadler has enjoyed the support of the influential Porsche and Piech families, who control the VW group. But it is now an open question if they will sacrifice the boss of the profitable VW subsidiary.

The arrest of Mr Stadler marks a shift from Germany’s new federal government approach to the diesel crisis. Last week prosecutors in Lower Saxony, home to VW, imposed a €1 billion fine on the company for manipulated software that made diesel engines appear cleaner than they were.

Latest recall

In January German transport authority KBA ordered Audi to recall 127,000 saloon and SUVs with so-called defeat software. The KBA is now also examining the new A8 model, with further recalls not ruled out.

Amid ongoing investigations into all VW brands, Stuttgart prosecutors arrested a senior Porsche manager in April while Wolfgang Hatz, a former VW and Audi development manager, has been in custody since March.

As the diesel scandal drags on, and pulls in Daimler and BMW, VW still faces faces legal action in over 50 countries over diesel manipulation, despite settling cases in the US and Germany.