VW Denies Ex-Chairman's Accusations in Diesel Cheating Scandal

Volkswagen AG’s supervisory board rejected accusations by former Chairman Ferdinand Piech that top leaders were aware of the diesel-engine manipulations months before the official disclosure, as internal fingerpointing over the scandal escalates.

In an independent investigation last year by U.S. law firm Jones Day, Piech’s allegations against key members of the supervisory board were determined to be "implausible," the German automaker’s supervisory board said in a statement Wednesday.

"The board of management will carefully weigh the possibility of measures and claims against Mr. Piech," it said in the statement. It declined to elaborate as investigations are ongoing.

There’s a lot at stake for VW and former Chairman Piech, who orchestrated the manufacturer’s rise from a troubled German industrial behemoth into a global automotive powerhouse that outsold industry leader Toyota Motor Corp. last year. VW reached settlement agreements with U.S. authorities in recent months worth more than $20 billion to make up for cheating on emissions tests. But evidence that top management was aware of the illicit conduct would provide fresh ammunition for legal claims from disgruntled investors across the globe, potentially adding billions of dollars in costs.

Germany’s Bild newspaper reported earlier that Piech told German prosecutors in Braunschweig that after learning about possible cheating on VW’s diesel engines in February 2015, he informed then CEO Martin Winterkorn and subsequently supervisory board members, including  Stephan Weil, prime minister of the German state of Lower Saxony, works council chief Bernd Osterloh, former IG Metall union head Berthold Huber and Wolfgang Porsche. Piech stepped down as chairman in April 2015 after losing a power struggle with Winterkorn.

Weil reiterated in a statement on Wednesday that he only learned about the manipulation on Sept. 19, 2015. "Any other description is plain wrong," he said. A spokesman for Wolfgang Porsche referred to the statement by VW’s supervisory board. Huber and Osterloh said in a joint statement that Piech’s allegation "is untrue."

"We expect that the management board examines in due course if it needs to take actions against Piech," Huber and Osterloh said. Huber, Osterloh and Piech’s cousin Wolfgang Porsche sided with Winterkorn in 2015 when the grandson of Beetle creator Ferdinand Porsche decided to escalate a power struggle he lost in the end.

Piech’s own role remains unclear. According to the U.S. Department of Justice, the cheating dates back to at least May 2006. Piech ousted Winterkorn’s predecessor, Bernd Pischetsrieder, as VW CEO that year. The departure came several months after VW shot down talks over a far-reaching alliance with Daimler AG which would have given VW access to its German peer’s diesel technology, people familiar with the matter said last month.