German newspaper Bild am Sonntag reported this week that a Volkswagen (VW) manager, Oliver Schmidt, told the former CEO and other managers that VW diesel emission violations could cost up to $18.5 billion, almost a month before investors were informed. That information was made available to investors on Sept. 18, 2015.
Schmidt was later arrested in Miami while on holiday last January, and held without bail for his role in VW’s “dieselgate.” The German report cited US investigations as a source of this information. Neither VW nor Schmidt’s lawyers would comment on this disclosure while the investigation is ongoing.
VW, as a commercial corporation, admitted responsibility for using defeat device or software to reduce diesel emissions during testing. It has also paid the highest compensation in the industry’s history to US environmental authorities. This makes arresting VW executives and making further “investigations” meaningless. They serve no purpose except cover up for the inadequacy of vehicle exhaust testing and the monitoring mechanism itself.
It is no secret that all diesel engines produce more harmful and toxic fumes during actual road conditions that exceed a test environment. VW’s fault was merely being found out as it overplayed the game of artificially reducing emissions.
In the latest revelation that VW top executives were warned of costs of illegal emissions a month before disclosure, executives deny any wrongdoing. In the annual report, VW disclosed that its management did not make details of the scandal public before Sept.18, 2015, because board members considered costs would be “controllable overall with a view to the business activities of Volkswagen Group.”
German securities law requires firms to publish any market-sensitive news in a timely fashion. It is therefore reasonable to assume that managers took less than a month to understand the financial implications before they made a public disclosure on Sept. 18, 2015. This makes it a “timely fashion” by any reasonable definition. And if Schmidt is the source of that information, what is the point of arresting the whistleblower?
• Adel Murad is a senior motoring and business journalist based in London.
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