Recently, Volkswagen, the popular German automaker has been fined a whopping amount of one billion euros (which amounts to $1.18 billion) for diesel emission cheating. This is one of the biggest fines ever to be imposed by German authorities on a company. This fine was followed by a U.S. plea agreement dated last year January. According to the agreement VW had agreed paying $4.3 billion in order to resolve criminal and civil penalties in terms of illegal software installation in diesel engine for cheating strict U.s. anti – pollution tests.
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After thorough examination of the cars, the fine was accepted by the VW AG. It was also decided that no appeal against the fine imposition would be made. In fact, VW AG takes full responsibility for the crisis of the diesel engines and takes this as a leap towards correcting the same error. This was stated in a report.
The fine, although accepted, proves to be a big blow to the company and to German auto industry as a whole. Germany’s auto industry seems to fail ridding itself off diesel emission crises. In fact, the German government had ordered Daimler to recall almost 2,40,000 cars which have been illicit emissions-control devices fitted onto them, out of the total of 7,74,000 cars.
VW’s chairman Hans Dieter Poetsch is in fact being investigated by the Braunschweig prosecutors for suspected market manipulation, even after agreeing to pay the fine. Poetsch is also CEO of VW's majority stakeholder Porsche SE. He is also being separately investigated by prosecutors in Stuttgart for the same thing.
The fine however does not seem to address civil claims. It simply ends certain regulatory offence proceedings against the company.
VW set aside 25.8 billion euros for diesel cheating scandal and Wednesday’s fine was not a part of it. This fine would definitely hit the earnings of the company and the fine has been called “extreme painful” by Evercore ISI analyst Arndt Ellinghorst.
