Volkswagen’s D&O liability insurers agree to pay € 270m for diesel emissions scandal



FRANKFURT – Volkswagen on Wednesday said it had agreed to settle complaints against four former executives, including longtime CEO Martin Winterkorn, who would see the automaker receive € 288m ($ 351m) in compensation related to its scandal emissions.

The settlement came the same day Berlin prosecutors accused Winterkorn of giving false testimony in the German parliament when he said he was unaware the automaker had rigged diesel engine tests. before they are made public.

The deal marks a major milestone in Volkswagen’s efforts to turn a page on its biggest corporate scandal, which has so far cost it more than € 32 billion in vehicle repairs, fines and court costs .

The scandal, which Volkswagen initially blamed on a small number of rogue engineers, also prompted it to launch a huge investment in electric cars.

Volkswagen and main shareholder Porsche SE are still the subject of € 4.1 billion in shareholder claims in connection with the scandal, but it could be years before a deal is reached.

Winterkorn resigned as CEO of Volkswagen in September 2015, a week after the scandal – in which the group admitted to using illegal software to rig tests of US diesel engines – erupted.

Wednesday’s deal, which mainly consists of a payment of € 270 million in directors ‘and officers’ liability insurance, also includes a settlement with former Audi boss Rupert Stadler.

It has yet to be approved at the group’s annual general meeting on July 22.

A spokesperson for Winterkorn, who was CEO of Volkswagen for almost nine years, declined to comment on the charges against him by prosecutors in Berlin.

Volkswagen, the world’s second-largest automaker, said in late March that it would seek damages from Winterkorn and Stadler for breach of due diligence under the Joint Stock Companies Act.

Volkswagen concluded that Winterkorn failed in its duty of care by failing to fully and quickly clarify the circumstances behind the use of illegal software functions in certain diesel engines sold in North America between 2009 and 2015.

Under the deal, Winterkorn and Stadler will pay € 11.2 million and € 4.1 million respectively.

Former Audi board member Stefan Knirsch agreed to settle for € 1million and former Porsche AG board member Wolfgang Hatz € 1.5million, Volkswagen said .

A further sign that the legal implications of the scandal will still be felt for some time to come, Volkswagen said on Wednesday it was under investigation in France following a December ruling from Europe’s highest court.

($ 1 = 0.8205 euros) (Reporting by Christoph Steitz, Jan Schwartz, Thomas Escritt and Sabine Siebold. Editing by Mark Potter)

Photograph: In this archive photo from Monday, April 27, 2020, the Volkswagen logo stands on top of a VW headquarters building in Wolfsburg, Germany. Volkswagen is gradually starting production at major factories after the crown has been locked. (Swen Pfoertner / dpa via AP.

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