Report: Piech Throws Winterkorn Under Volkswagen Bus – Forbes
“The noose tightens” for Volkswagen’s deposed CEO Martin Winterkorn, wrote Germany’s Welt: Ferdinand Piech, Volkswagen’s powerful patriarch, testified against his former protégé Martin Winterkorn. This according to a widely-quoted report by Germany’s Spiegel Magazin. At the very least, the testimony could cost Winterkorn his freedom, and Volkswagen a few additional billions. In the extreme, it could shift the power in Berlin to the left.
Piech told German prosecutors that he discussed Volkswagen’s dieselgate problem with Winterkorn as early as February 2015, says the report. At the time, Piech was chairman of Volkswagen’s Supervisory Board, and it was his job to monitor CEO Winterkorn. Piech is said to have testified that he heard from an informant that VW was having a big problem in America, and that US regulators already notified Volkswagen. Supposedly, Winterkorn answered that this was untrue, and that such a notification did not exist.
So far, German media has been unable to elicit a comment from the prosecutors, or from Volkswagen. However, a lawyer working for Winterkorn told Reuters that “Winterkorn learned a few days ago of the existence of more detailed testimony by the former chairman, Prof. Dr. F. Piech.”
German journalists are busy checking the timeline of the Volkswagen scandal. In April 2015, two months after he allegedly had the dieselgate discussion with Winterkorn, Piech dropped his famous “I am at a distance to Winterkorn” quote that triggered a leadership crisis at Volkswagen, “a power struggle which he lost,” as the Frankfurter Allgemeine Zeitung notes. With the votes of Volkswagen’s Works Council and the State of Lower Saxony, Winterkorn was kept in power. Piech stepped down, but continued pulling strings.
Half a year later, the dieselgate scandal erupted in earnest. Winterkorn resigned, claiming that he ‘wasn’t aware of any wrongdoing.’ The scandal is far from over. So far, the financial damage in North America alone is “up to $24 billion,” says the FAZ. A few Volkswagen managers are behind bars in the U.S. and South Korea. Winterkorn himself became a target of the prosecution in Germany, where he is under suspicion of fraud. His home and office in Munich were raided a few weeks ago. If convicted for fraud, Winterkorn could land in German jail for up to 5 years, or for 10 if found guilty of aggravated fraud. One definition of aggravated fraud in the German code of law is “large-scale loss of assets.” Pending lawsuits in Germany claim loss of stockholder assets of up to $10 bln.
After Winterkorn was added to a growing list of suspects, Germany media mused that it was the FBI that tipped off the Germans. Prosecutor spokesman Klaus Ziehe denied any connection, and said the “sources could be elsewhere.” Apparently, the source was right at the top.