Volkswagen fined $1.18B for diesel emissions cheating

Marco Green
June 14, 2018

In fact, the German government just levied one of its largest-ever penalties against a company by slapping Volkswagen with a 1 billion euro bill according to a report by Reuters. The settlement of the criminal case will have a positive impact on other proceedings in Europe, the company said.

The scandal, which came to light in the United States in 2015 after VW admitted to circumventing the emissions control system there for diesel vehicles sold since 2009, has so far cost the German automaker $4.3bn (£3bn) in federal penalties over there.

Volkswagen's new Chief Executive Herbert Diess said further steps were needed by the company to overcome its diesel cheating scandal and to restore trust in the company.

VW still faces a multitude of probes both in Germany and overseas, with legal proceedings in 55 countries pending and investigations into market manipulation in Germany.

So far it has spent more than $7.4bn (£5.3bn) buying back about 350,000 USA vehicles, some of which will be resold while others will be destroyed. VW had net cash of about 24 billion euros at the end of the first quarter, providing a substantial liquidity buffer to digest the impact.

Analysts at Evercore ISI said the fine would likely help end all criminal investigations against VW in Europe, but would not settle shareholder lawsuits.

Prosecutors concluded that the German automaker failed to properly oversee the activity of its engine development department, resulting in more than 10.7 million diesel vehicles with illegal emissions-controlling software being sold worldwide. "Paying out 1 billion euros is extremely painful but in the broader context it isn't a material number".

Other reports by Click Lancashire

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