Volkswagen to take €2.5bn hit from emissions scandal

Former VW engine chief arrested in diesel investigation, report says

Volkswagen to take €2.5bn hit from emissions scandal

German prosecutors have arrested a second employee of Audi, the carmaker owned by Volkswagen, in a deepening investigation into an emissions- cheating scandal.

German police arrested the former chief of engine development on Wednesday in connection with the vehicle maker's attempt to rig diesel-powered automobiles to deceive emissions testing.

Munich prosecutors have named the person taken into custody as Wolfgang Hatz, former board member at VW unit Porsche. So the brands lose a champion on that front, while other high-ranking VW Group executives with suspected ties to the diesel scandal likely won't be sleeping well for the foreseeable future.

Last year Porsche said no evidence had been found against him.

According to Bloomberg, Hatz was close to former VW chief executive Martin Winterkorn, who has denied any knowledge of the "defeat devices" which allowed vehicles to artificially reduce emissions during tests before their existence was exposed publicly.

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A lawyer representing Hatz declined to confirm the arrest and also declined any further comment.

Its shares dropped after the statement and were down 3.1 per cent at the bottom of the German blue-chip DAX index which was up 0.2 per cent.

Announced Friday by the German automaker, the added cost could push Volkswagen's total damages from the scandal past $30 billion.

Up until the most recent charge, VW has set aside €22.6billion euros to cover the costs of fines against them and for vehicle retrofits.

Last year, VW agreed with U.S. authorities to spend up to $15.3 billion to buy back or fix up to 475,000 2.0-litre polluting diesel cars.

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Reuters provides more: "In March Munich prosecutors searched offices at the carmaker's Ingolstadt base, where about 44,000 workers are employed, and the premises of Jones Day, a United States law firm hired by VW to lead an investigation into the emissions scandal".

Volkswagen said the extra provisions would be reflected in its third-quarter operating results, which are due to be published on October 27.

USA vehicles rigged with the emissions-cheating technology represent only part of millions of other Volkswagen diesel cars linked to the scandal worldwide.

He was in charge of Audi's engine development from 2001 to 2007 before taking over the role for the entire Volkswagen Group.

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