Audi Added to German Diesel Investigation, May Forfeit Profit

(Bloomberg) -- Volkswagen AG's Audi unit was made a party to the diesel-emission probe by Munich prosecutors, a step that may allow the seizure of profits the company made from selling vehicles with rigged engines.

Munich prosecutors investigating Audi employees for fraud have formally added the carmaker to a related inquiry looking into whether executives neglected their supervisory duties allowing the cheating to happen, Karin Jung, spokeswoman for the investigators, said in an emailed statement. The review will be handled under administrative rules that allow for sanctioning wrongdoing at companies.

While Germany doesn't allow for prosecution of companies under criminal laws, an administrative probe is the tool prosecutors can use to sanction firms. The rules allow the seizure of profits made from illegal conduct. Siemens AG, which faced the same type of review during an corruption probe about a decade ago, settled with Munich prosecutors for 600 million euros ($706 million).

Audi was notified about the step and will continue to work constructively with prosecutors, company spokesman Oliver Scharfenberg said Saturday.

Volkswagen is already facing the same type of review by Braunschweig prosecutors, who are investigating whether the Wolfsburg-based carmaker committed fraud by installing computer software that only turned on a vehicle's pollution blocking equipment during emissions testing.

VW admitted in September 2015 that about 11 million diesel vehicles worldwide were sold with so-called defeat devices.

The carmaker attempted to boost sales by offering “clean diesel” that would meet heightened emissions standards and attract environmentally conscious customers. The company couldn't sell vehicles in the U.S. without certifying they met the emissions standards and couldn't meet the standards with its diesel vehicles without cheating.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net.

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Steve Geimann