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Volkswagen Former CEO Told of Defeat Device Admission Weeks Before News was Public

February 27, 2016

A VW dieselPhotograph by Odd Anderson — AFP/Getty Images

Volkswagen’s former chief executive Martin Winterkorn was informed that the carmaker had told regulators it was using defeat devices two weeks before the scandal became public, German tabloid Bild am Sonntag reported on Sunday.

It said it was in possession of a letter sent by an unnamed manager directly to then-CEO Winterkorn on Sept. 4 that said: “In the conversation on 03.09.2015 with the regulator CARB (California Air Resources Board), the defeat device was admitted.”

Volkswagen’s U.S. CEO Michael Horn told a U.S. House of Representatives hearing in October the company had told regulators on Sept. 3 it was using defeat devices.

A letter pointing to the then-CEO could lend weight to the cases of shareholders planning to sue Volkswagen for compensation for the plunge in its share price, saying VW should have told the public as soon as it became aware.

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The law firm acting for Winterkorn, who resigned on Sept. 23, was not immediately reachable for comment.

A Volkswagen spokesman said the company declined to comment on an ongoing investigation.

German financial watchdog Bafin is investigating whether Volkswagen breached disclosure rules when it admitted to falsifying U.S. emissions tests in September. It said last month the probe would probably take several more months.

In parallel with investigations by various authorities, Volkswagen has hired law firm Jones Day to carry out an internal probe into identifying who ordered engineers to develop and install software designed to cheat U.S. diesel-emissions tests, and who knew.

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The discovery of the cheating, which U.S. authorities announced on Sept. 18, unleashed one of Volkswagen’s biggest-ever scandals, leading to the resignation of several top managers and likely to cost it tens of billions of dollars.

The news wiped 17%, or more than 13 billion euros ($14.2 billion), off Volkswagen’s market value on the next trading day.

Volkswagen is expected to present the first results of its investigation in April. It has said so far it has no reason to believe that more than a few people were involved in the cheating, and not at top level.