Audi to Pay $927 Million to Settle Diesel-Engine Probe in Germany -- WSJ
October 17 2018 - 3:02AM
Dow Jones News
By William Boston
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 17, 2018).
BERLIN -- German luxury car brand Audi on Tuesday said it has
agreed to pay a fine of EUR800 million ($927 million) to settle a
German fraud investigation related to the sale of cars with six-
and eight-cylinder diesel engines that contained illegal software
to manipulate emissions.
The settlement removes another uncertain financial risk for
Audi's parent, Volkswagen AG, which has shouldered fines, penalties
and compensation payments of more than $27 billion after admitting
in 2015 it rigged nearly 11 million diesel vehicles to cheat
emissions tests.
Earlier this year, Volkswagen settled a similar case in
Braunschweig, near its headquarters, and agreed to pay a EUR1
billion fine. The only outstanding fraud case in stemming from the
diesel emissions scandal is still ongoing in Stuttgart, where state
prosecutors are investigating the role Volkswagen's sports car
brand Porsche played in the diesel affair.
Audi issued a profit warning, saying the fine would force the
car maker to "significantly undercut major financial key
performance indicators forecasted for the fiscal year 2018."
A Volkswagen spokesman said the company would book the charge in
its third quarter results and that there would be no impact on
Volkswagen earnings. The company didn't intend to change its
earnings outlook for the full year.
While the move settles one of the most significant pending cases
against Volkswagen and its subsidiaries, it doesn't affect a number
of criminal investigations of current and former employees of the
company.
Earlier this month, Volkswagen sacked the former chief executive
of Audi, who has been in preventive detention in Munich since June.
He was arrested when investigators found evidence that allegedly
showed he was trying to tamper with witnesses and impede the
investigation.
Investors welcomed the news of the Audi settlement. Volkswagen's
shares were trading at EUR147.76, up 2.3%, in early afternoon on
the Frankfurt Stock Exchange.
Porsche Automobil Holding SE, the listed investment vehicle that
holds the Volkswagen shares of the Porsche and Piech families, the
heirs to Volkswagen Beetle designer Ferdinand Porsche, issued a
profit warning in the wake of the Audi announcement.
The holding's shares tend to track Volkswagen shares. The
holding carries no liability for the operations of Volkswagen and
its subsidiaries. It wasn't immediately apparent how the holding
would be affected by the Audi fine.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
October 17, 2018 02:47 ET (06:47 GMT)
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