CEO of VW’s Audi Arrested in Germany over Emissions Cheating Scandal

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German authorities have arrested Volkswagen’s luxury line Audi to the point where it is the most senior company executive and to be taken into custody of the automobile manufacturer’s emission test fraud scandal.

Earlier this month, Munich prosecutors, who extended the investigation to Audi, said it was due to fears that Rupert Stadler could prevent investigations into the scandal and drag Volkswagen to a leadership crisis.

The arrest comes as Volkswagen (VW) new CEO Herbert Diess tries to introduce a new leadership structure that includes the Stadler to speed up the transition to electric vehicles following “dieselgate” problems.

The company criticized the company for slowing the reform, saying that Evercore ISI analysts are another low point in VW’s diesel epic. “About three years after the diesel scandal exploded, the police must act against Audi CEO.”

VW admitted to using illegal software in September 2015 to cheat US emissions tests on diesel engines, foster the company’s biggest crisis and drive regulatory pressure on the auto industry.

The United States found a criminal complaint against former VW CEO Martin Winterkorn in May, but it is unlikely to face US officials because Germany does not return its citizens to countries outside the European Union.

Munich prosecutors say Stadler’s arrest was not ordered by US authorities. The administrators said they were arrested early Monday in Ingolstadt’s house.

“In an investigation into the diesel business and Audi engines, the Munich prosecutor’s office has been ordered to arrest Professor Rupert Stadler on June 18, 2018,” the statement from the prosecution office said.

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A judge in Germany said that Stadler was kept in custody and instructed to block or prevent the diesel investigation.

Audi and VW confirmed the arrest and assumed Stadler was innocent unless proved otherwise. Stadler himself was not immediately available for comment.

At 1040 GMT, VW stocks fell 2.7%, to 156.70 euros, one of the biggest declines in a blue-chip stock in Europe.

Under fire
Stadler was under fire because Audi confessed in November 2015, two months after VW. It also installed illegal “defeat device” software to cheat US emission tests.

Munich prosecutors are investigating whether Stadler moves quickly enough to stop deliveries of manipulated Audi models in Europe when emissions problems arise.

Stadler continued to serve with the support of the members of the Porsche-Piech family at VW’s control. Prior to becoming Audi’s CEO in 2007, Stadler worked as a staff chief of Ferdinand Piech, former president of VW.

Earlier this month, Munich prosecutors investigated Audi’s investigation, suspecting fraud and fake advertisements, as a member of the senior management of Stadler and Audi.

Stadler’s arrest will increase tension on VW’s supervisory board, which will expose fragile fires between the risk management, the workers’ representatives and the carmaker’s board members in the Lower Saxony mainland.

The company, which controls VW and Audi, said that the arrest of Stadler, the spokesman of Porsche SE, will be discussed on Monday at both VW and Audi’s board meetings.

VW has already allocated up to $ 30 billion to cover the cost of litigation related to monetary penalties, vehicle introductions and emission test tricks.

Most of the questions were in the United States, where a total of nine people were accused and two former VW administrators were convicted and sentenced to imprisonment.

But the investigation is continuing elsewhere. German prosecutors have sentenced us to 1 billion euros ($ 1.2 billion) in scandal over the past week

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