Volkswagen Group responded to charges that current and former executives engaged in market manipulation, calling the allegations "unjustified" and "unsubstantiated."
The company's board issued a formal statement Thursday disputing the indictments brought against CEO Herbert Diess and former bosses Martin Winterkorn and Ferdinand Piech. VW says the precedent set by U.S. legal authorities led the company to believe that any consequences would not be material, calling the U.S. response a "paradigm shift" that could not have been foreseen.
"The company and the persons responsible have fulfilled all their reporting obligations under capital markets law. Volkswagen AG will defend itself with all available legal means against these unjustified allegations. If there is a trial, we are confident that the allegations will prove to be unfounded," said Dr. Manfred Döss, Head of Legal Affairs at VW AG.
Prosecutors in the German city of Braunschweig claimed that the executives deliberately delayed informing markets of the financial fallout related to the emissions scandal, it was reported last week. According to the prosecutors, Winterkorn knew of the brewing scandal as early as May of 2015; Poetsch knew by June 29; and Diess was made aware on July 27.
It was not until U.S. federal and state regulators accused VW of employing emissions defeat devices in September of that same year that VW officials acknowledged the existence of the issue.
VW said its Group Board of Management had no reason to believe the company could face financial consequences that would require a report to the capital markets up until the EPA said it had violated emissions regulations on Sept. 18, 2015 and that the company considered the information it had immaterial.The company also said the information was reviewed by lawyers at the time and they felt it didn't meet the threshold for dire financial consequences based on cases involving previous automakers.
The company noted that internal investigations conducted since the scandal broke revealed that no member of its Board of Management, past or present, had information that would meet the standard for a financial disclosure to capital markets.
After the charges were announced last week, VW's board met and decided that Diess would remain CEO during the legal proceedings.
The charges are the latest in ongoing civil and criminal inquiries into VW's circumvention of emissions controls in its diesel-powered vehicles.