Volkswagen not to submit interim results in sensitive diesel scam probe

Volkswagen which had earlier stated that it would submit interim results of its probe into the diesel emissions scam, has now said it will not be able to do so because of various sensitive reasons. The company, in a press release stated that “after a thorough examination of the legal situation, the Supervisory Board and the Management Board of Volkswagen have nevertheless had to recognise that a disclosure of interim results of the investigation at this point in time would present unacceptable risks for Volkswagen and, therefore, cannot take place now”. This decision, the company said, is based on the assessment of the U.S. law firms retained by Volkswagen (Sullivan & Cromwell and Jones Day), which have both strongly advised against such a disclosure independently of each other.

Volkswagen said it regretted that it has had to move away from the original plan to disclose interim results of the investigation by the end of April, 2016.

Meanwhile, in an earlier development, according to unconfirmed sources, Volkswagen and US officials reached a deal under which the car major has offered to buy back 500,000 diesel cars that used the trick software to evade US emission norms.

It was at the end of September 2015 that the the Supervisory Board of Volkswagen Aktiengesellschaft had assigned law firm Jones Day with a comprehensive investigation in connection with the diesel matter.

It may be recalled that in late 2015, Volkswagen Group of Germany was exposed in a scam that involved manipulations by the company that violated emission norms. Revelations from the Environmental Protection Agency (EPA) in the US stated VW had dodged environmental rules for which penalty could run up to more than $18 billion. This could also result in the Volkswagen Group recalling 11 million cars built anywhere between 2009 and 2015.

The emissions scam exploded when the EPA issued a notice of violation (NOV) of the Clean Air Act (CAA) to Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc. alleging that the four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 included software that circumvented EPA emissions standards for certain air pollutants. California separately issued an In-Use Compliance letter to Volkswagen, and EPA and the California Air Resources Board (CARB) both initiated investigations based on Volkswagen’s alleged actions.

Volkswagen Group has several prestigious brand under its belt. These include include Volkswagen, Audi, Bentley, Lamborghini, Porsche, Bugatti, SEAT, Skoda, Ducati, MAN and Scania.

Coming back to the latest investigation, the company said it is already far advanced and is being pursued intensely. For this purpose, approximately 65 million documents were submitted for electronic review, of which more than 10 million were forwarded for review by Volkswagen's lawyers. Around 450 interviews have also been conducted about the diesel matter; dozens of additional interviews are planned. Based on the current assessment, Jones Day expects the investigation to conclude in the fourth quarter of 2016, the press release stated.

After a thorough examination of the legal situation, the Supervisory Board and the Management Board of Volkswagen have nevertheless had to recognise that a disclosure of interim results of the investigation at this point in time would present unacceptable risks for Volkswagen and, therefore, cannot take place now.

According to the company release, the reasons lie in the following developments in proceedings involving Volkswagen in connection with the diesel matter in the United States:

Volkswagen's complex negotiations with a large number of parties in the United States (including private plaintiffs and multiple U.S. regulators, including the Environmental Protection Agency (EPA), the California Air Resources Board (CARB), the Federal Trade Commission, the Attorneys General of each of the 50 states, and, in particular, the U.S. Department of Justice) have entered a decisive phase sooner than anticipated and require Volkswagen to maintain the highest degree of confidentiality. The extensive and confidential nature of these negotiations and Volkswagen's cooperation with the Department of Justice restrict Volkswagen´s ability to comment further on necessarily tentative results of the continuing investigation.