Stadler is highest ranking VW Group executive arrested (so far) over emissions scandal

Stadler is highest ranking VW Group executive arrested (so far) over emissions scandal

Top Volkswagen officials were holding crisis talks to find a temporary chief for premium brand Audi after CEO Rupert Stadler was arrested on Monday (18 June), a source told the Reuters news agency.

Stadler is the most senior Volkswagen Group official so far to be taken into custody over the carmaker's emissions test cheating scandal.

"We need to find a solution for Audi's leadership for the time when he is not here," a source familiar with the talks told Reuters about Stadler's position. "We will comment on this later."

Reuters said VW and Audi directors were discussing the leadership crisis in separate meetings on Monday with one source saying Dutchman Bram Schot was the front runner to become interim Audi chief.

According to the news agency, Germany's Sueddeutsche Zeitung newspaper said VW's supervisory board had already picked Schot for the job and only needed the formal approval of Audi's directors. VW denied any such appointment had been made.

Earlier, Munich prosecutors had told Reuters Stadler was being detained due to fears he might hinder an ongoing investigation into the scandal, plunging VW into a leadership crisis.

The news agency noted reports of the arrest came as new group CEO Herbert Diess is trying to introduce a new leadership structure, which includes Stadler, and speed the group's shift toward electric vehicles in the wake of its emissions scandal.

"As part of an investigation into diesel affairs and Audi engines, the Munich prosecutor's office executed an arrest warrant against [Stadler] on 18 June, 2018," the office said in a statement cited by Reuters.

A judge had ordered Stadler remanded in custody to prevent him from obstructing or hindering the diesel investigation, the statement said.

Audi and VW confirmed the arrest to Reuters and reiterated there was still a presumption of innocence for Stadler.

A spokesman for Porsche SE had said earlier Stadler's arrest would be discussed at a supervisory board meeting on Monday.

Reuters noted the US filed criminal charges against former VW CEO Martin Winterkorn in May but he is unlikely to face US authorities because Germany does not extradite its nationals to countries outside the European Union.

Winterkorn resigned in the days after the cheating was disclosed but Stadler has remained in post and was this year promoted by new VW chief Herbert Diess in an overhaul aimed at speeding up the group's reforms, Reuters noted.

"His arrest is another low point in VW's diesel saga," Evercore ISI analysts were cited as saying, having earlier criticised the VW group for slow reform.

"Almost three years after the diesel scandal broke, it takes police to take action against the Audi CEO."

Two low level VW officials have been jailed in the US since the scandal broke. One was an executive posted to the US who had since returned to work in Germany but was arrested when he visited Florida on holiday.

The CEO was arrested at his home in Ingolstadt, in the early hours on Monday, Munich prosecutors told Reuters.

They added the move against Stadler was not made at the behest of US authorities.

"The arrest warrant was made because of a risk that evidence might be suppressed," Stephan Necknig, a spokesman for the Munich prosecutor's office, told Reuters Television.

"During a search last week there were signs that the accused may tamper with evidence. To influence other suspects or witnesses, or people who could provide information to the investigating authorities," he added.

Audi and VW said Stadler was presumed innocent unless proved otherwise.

By 1409 GMT, VW shares were down 3% to EUR156.08, one of the biggest falls by a European blue-chip share, Reuters said.

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