Volkswagen which had earlier
stated that it would submit interim results of its probe into the diesel
emissions scam, has now said it will not be able to do so because of various
sensitive reasons. The company, in a press release stated that “after a
thorough examination of the legal situation, the Supervisory Board and the
Management Board of Volkswagen have nevertheless had to recognise that a
disclosure of interim results of the investigation at this point in time would
present unacceptable risks for Volkswagen and, therefore, cannot take place
now”. This decision, the company said, is based on the assessment of the U.S.
law firms retained by Volkswagen (Sullivan & Cromwell and Jones Day), which
have both strongly advised against such a disclosure independently of each
Volkswagen said it regretted
that it has had to move away from the original plan to disclose interim results
of the investigation by the end of April, 2016.
Meanwhile, in an earlier development, according to unconfirmed sources,
Volkswagen and US officials reached a deal under which the car major has
offered to buy back 500,000 diesel cars that used the trick software to evade US
It was at the end of September
2015 that the the Supervisory Board of Volkswagen Aktiengesellschaft had assigned
law firm Jones Day with a comprehensive investigation in connection with the
It may be recalled that in
late 2015, Volkswagen Group of Germany was exposed in a scam that involved
manipulations by the company that violated emission norms. Revelations from the
Environmental Protection Agency (EPA) in the US stated VW had dodged environmental
rules for which penalty could run up to more than $18 billion. This could also
result in the Volkswagen Group recalling 11 million cars built anywhere between
2009 and 2015.
The emissions scam exploded
when the EPA issued a notice of violation (NOV) of the Clean Air Act (CAA) to
Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc. alleging that the
four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015
included software that circumvented EPA emissions standards for certain air
pollutants. California separately issued an In-Use Compliance letter to
Volkswagen, and EPA and the California Air Resources Board (CARB) both
initiated investigations based on Volkswagen’s alleged actions.
Volkswagen Group has several
prestigious brand under its belt. These include include Volkswagen, Audi,
Bentley, Lamborghini, Porsche, Bugatti, SEAT, Skoda, Ducati, MAN and Scania.
Coming back to the latest
investigation, the company said it is already far advanced and is being pursued
intensely. For this purpose, approximately 65 million documents were submitted
for electronic review, of which more than 10 million were forwarded for review
by Volkswagen's lawyers. Around 450 interviews have also been conducted about
the diesel matter; dozens of additional interviews are planned. Based on the
current assessment, Jones Day expects the investigation to conclude in the
fourth quarter of 2016, the press release stated.
After a thorough examination
of the legal situation, the Supervisory Board and the Management Board of
Volkswagen have nevertheless had to recognise that a disclosure of interim
results of the investigation at this point in time would present unacceptable
risks for Volkswagen and, therefore, cannot take place now.
According to the company release,
the reasons lie in the following developments in proceedings involving
Volkswagen in connection with the diesel matter in the United States:
negotiations with a large number of parties in the United States (including
private plaintiffs and multiple U.S. regulators, including the Environmental
Protection Agency (EPA), the California Air Resources Board (CARB), the Federal
Trade Commission, the Attorneys General of each of the 50 states, and, in
particular, the U.S. Department of Justice) have entered a decisive phase
sooner than anticipated and require Volkswagen to maintain the highest degree
of confidentiality. The extensive and confidential nature of these negotiations
and Volkswagen's cooperation with the Department of Justice restrict
Volkswagen´s ability to comment further on necessarily tentative results of the
The further disclosure or
characterization of interim results, which are currently available, would
likely prejudice the rest of the investigation at this time, in particular
because individuals who have yet to be questioned could align their statements
with the contents of the interim report.
In counsel's view, a disclosure would also
significantly impair Volkswagen's cooperation with the Department of Justice
and weaken Volkswagen's position in any remaining proceedings.
In counsel's view, such disclosure could also
jeopardize the credit that Volkswagen may expect to receive in the event of its
full cooperation with the Department of Justice. According to Volkswagen's
legal advisers, this could have very substantial negative financial
lf a full settlement can be
achieved with the Department of Justice, the Supervisory Board and the
Management Board currently expect that a detailed statement of the facts of
this matter will be made public in the U.S. at that time. This is because the
settlement of a criminal investigation with the Department of Justice is
customarily accompanied by a detailed statement of facts, agreed to by the parties,
the statement concluded.
The company said that it
regretted that it is not able to publish interim results by the end of April as
Volkswagen has reached an agreement in principle with the US
In connection with the diesel
issue, Volkswagen AG confirmed that an agreement in principle with the
Department of Justice (Environmental Division), the Environment Protection
Agency (EPA), and the California Air Resources Board (CARB), with the full
involvement of the Federal Trade Commission (FTC), has been reached in the
United States. This agreement in principle will be incorporated into binding
consent decrees by the Department of Justice and the FTC in the coming weeks,
VW stated in a press release.
Furthermore, Volkswagen has reached
an agreement on the basic features of a settlement with the class action
plaintiffs in the lawsuit in San Francisco. This agreement will be incorporated
into a comprehensive settlement in the coming weeks. The judge presiding over the
court hearing in San Francisco, Charles R. Breyer, expressly welcomed this
development. The arrangements in the making in the United States will have no
legal bearing on proceedings outside of the United States. Ongoing
investigations by the Department of Justice, Criminal Division, and the State
Attorneys General are not prejudiced by these agreements in principle.
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