Emissions Falsification Scandal Rocks Volkswagen...BERLIN, GERMANY - SEPTEMBER 22: The logo of German carmaker Volkswagen is visible on the front of a Volkswagen car on September 22, 2015 in Berlin, Germany. Volkswagen CEO Martin Winterkorn apologized yesterday to consumers following allegations by the U.S. Environmental Protection Agency that the company had installed software into its diesel cars sold in the USA that manipulated emissions test results. Volkswagen share prices have plummeted by approximately 32% on the Frankfurt stock exchange since yesterday and the company faces a recall of at least 470,000 cars and up to USD 18 billion in fines. (Photo by Sean Gallup/Getty Images)

Martin Winterkorn, Volkswagen’s former chief executive, received emails about the company’s diesel emissions crisis over a year before it became public, the company has admitted.

Mr Winterkorn, who resigned over the scandal in September, was also present at meetings where the issue was discussed last July, weeks before the issue become public on September 18.

However, the company insisted that there was no evidence that Mr Winterkorn read the emails or participated in the discussion at the periphery of the meeting on VW’s cheating in emissions tests. It added that the issue “did not initially receive particular attention” from the company’s management. Mr Winterkorn could not be reached for comment.

VW made the admissions in a statement announcing it was mounting a vigorous defence against legal action by a group of shareholders over the scandal. They had claimed in the action, filed in Germany, that the company failed in its legal duty to notify capital markets about important developments promptly.

The statement calls the shareholders’ legal action “without merit”.

The company has admitted since the US’s Environmental Protection Agency first made the scandal public that more than 11m diesel-engined vehicles worldwide were fitted with “defeat devices” to circumvent emissions tests. The devices detect when the vehicle is being tested and switch on instruments to reduce nitrogen oxide emissions but deactivate the controls at other times.

The company could face fines of tens of billions of dollars in the US over the cheating, which has taken place since 2008, and faces billions of euros of costs to fix the problem vehicles.

The statement confirms previous suspicions that the scandal started as a result of VW’s efforts to meet the US’s stricter emissions standards with equipment designed for Europe’s more lax rules.

Mr Winterkorn insisted when he resigned over the issue that he had become aware of the problems only just before they were made public and that he knew of no wrongdoing on his part.

Martin Winterkorn
© Bloomberg

However, Wednesday’s announcement said that a memo on the issue was prepared for Mr Winterkorn, pictured left, on May 23 2014, and that it was included in his “extensive weekend mail”.

“Whether and to what extent Mr Winterkorn took notice of this memo at that time is not documented,” the announcement said.

He received a subsequent email in November 2014 listing a series of product issues worldwide and estimating the cost of rectifying the US diesel issues at the relatively small sum of €20m.

“According to current knowledge, the diesel matter, as it was treated as one of many product issues facing the company, did not initially receive particular attention at the management levels of Volkswagen,” the statement said.

It goes on to say that the issue was discussed at a meeting on July 27 last year at which Mr Winterkorn and Herbert Diess, who remains head of the VW passenger car brand, were present. However, it says it is unclear whether it was understood at that stage that the defeat devices violated US law.

“Mr Winterkorn asked for further clarification of the issue,” the statement said.

It was only in August last year, according to the statement, that VW’s senior managers recognised that the defeat devices breached US law and decided to tell the EPA and California’s Air Resources Board.

The company did so at a meeting on September 3 that led to the issue becoming public on September 18.

Additional reporting by Patrick McGee in Geneva

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