FRANKFURT: Volkswagen’s supervisory boards suspended crisis talks to find a stand-in boss for its Audi brand which was convened after German authorities arrested current Audi Chief Executive Rupert Stadler as part of a probe into emissions test cheating.
The directors of Audi and Volkswagen discussed how to run its more profitable division without Stadler, but failed to come to a conclusion, the carmaker said late on Monday.
“The supervisory boards of VW and Audi have not yet reached a decision and continue to assess the situation,” a spokesman for VW said.
The dramatic development comes a week after Munich prosecutors raided Stadler’s home after charging him with fraud and falsifying documents that allowed diesel vehicles equipped with cheating software to be sold to European customers.
Four police officers detained the Audi boss at his home at between 6 and 7 am, a spokesman for Munich prosecutors told AFP, saying that the arrest was justified as he is suspected of “seeking to influence witnesses or other suspects”.
The arrest has kicked off a new debate over VW’s governance which could raise tensions on its supervisory board, putting at risk a fragile truce between management, VW’s controlling Piech and Porsche families, as well as representatives from labor and the region of Lower Saxony.
Stadler has denied the accusations and has said he is ready to be interrogated from Wednesday, added the spokesman.
Hours after the arrest, the VW group’s management named Dutchman Bram Schot, who joined VW in 2011, to take over from Stadler as interim CEO.
VW has for years said only lower-level managers knew of the emissions cheating, but U.S. authorities filed criminal charges against former VW boss Martin Winterkorn earlier this year, and Munich prosecutors widened their probe into Audi this month.
Stadler, 55, who joined Audi in 1990 and has been its CEO since 2007, has enjoyed the full backing of VW’s top brass so far.
But Dudenhoeffer said that may change, given the “very serious” allegations against him.
Stadler is the most senior executive yet to be detained in the dieselgate crisis, which started when the Volkswagen group admitted in 2015 to installing so-called “defeat devices” in some 11 million diesels worldwide that made them seem less polluting in lab tests than they actually were on the road.
The affected vehicles involved VW’s own-brand cars, but also those made by Audi, Porsche, Skoda and Seat.
Munich prosecutors said Stadler was being investigated for suspected fraud and false advertising and for his alleged role in helping to bring cars equipped with illegal software on to the European market.
Following his arrest, Munich prosecutors said Stadler, the most senior active VW official to be remanded in custody since the scandal broke, was being held on fears he might hinder their investigation.
“We need to find a solution for Audi’s leadership for the time when he is not here,” the source familiar with the talks said about Stadler’s position. “We will comment on this later.”
Stadler was given additional responsibilities for group sales in a revamp announced by VW’s new Chief Executive Herbert Diess in April.
On Monday, VW and Audi directors were discussing the leadership crisis in separate meetings, with one source saying Dutchman Bram Schot was the front-runner to become interim Audi chief.
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.
The diesel scandal has so far cost the VW group more than 25 billion euros ($29bn) in buybacks, fines and compensation, mainly in the United States where the cheating scam was first uncovered.
But pressure has been mounting on the auto giant to make amends in Europe too.
Just last week, VW agreed to pay a one-billion-euro fine to settle a probe by German prosecutors.
In doing so, VW said it admitted its “responsibility for the diesel crisis”.
Despite the controversy, the VW group last year reported global sales of 10.7 million vehicles — a new record.
Whereas group CEO Martin Winterkorn resigned in the days after the cheating was disclosed, Stadler resisted requests to fall on his sword, and instead received backing from the Porsche and Piech families to remain in his post.
“His arrest is another low point in VW’s diesel saga,” said Evercore ISI analysts, who have criticized the group for a slow pace of reform. “Almost three years after the diesel scandal broke, it takes police to take action against the Audi CEO.”
The United States filed criminal charges against Winterkorn in May, but he is unlikely to face U.S. authorities because Germany does not extradite its nationals to countries outside the European Union.
The Munich prosecutors said the move against Stadler was not made at the behest of U.S. authorities. The 55-year-old was arrested at his home in Ingolstadt in the early hours on Monday, they said.
“The arrest warrant was made because of a risk that evidence might be suppressed,” Stephan Necking, 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.
Sueddeutsche Zeitung, citing sources close to the investigation, said prosecutors had tapped Stadler’s phone just before searching his premises last week.
Audi and VW said Stadler was presumed innocent unless proved otherwise. Stadler himself was not immediately available for comment.
Asked whether U.S. authorities were also seeking to arrest Stadler, a spokesman for the Department of Justice said: “As a general matter, the department will neither confirm nor deny the existence of an ongoing investigation.”