German automobile manufacturer, Volkswagen (VOWG_p.DE) was fined 1 billion euros ($1.18 billion) over diesel emissions cheating in what amounts to one of the highest ever fines imposed by German authorities against a company, public prosecutors said.
The German fine follows a U.S. plea agreement from January 2017 when VW agreed to pay $4.3 billion to resolve criminal and civil penalties for installing illegal software in diesel engines to cheat strict U.S. anti-pollution tests.
“Following thorough examination, Volkswagen AG accepted the fine and it will not lodge an appeal against it. Volkswagen AG, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step toward the latter being overcome,” it said in a statement.
The prosecutor’s office in Braunschweig ordered the fine against the carmaker for organizational deficiencies in supervision which failed to prevent “impermissible software functions” from being installed in 10.7 million cars between 2007 and 2015.
“The Prosecutor’s Office in Braunschweig ascertained a violation of supervisory duties,” the prosecutor’s office said in a statement, adding that the fine did not address civil claims or claims by vehicle owners.
The 1 billion fine does however end regulatory offence proceedings against Volkswagen, which the Wolfsburg-based carmaker said it assumed would help to settle further administrative proceedings against VW in Europe.
Analysts at Evercore ISI said this fine would likely help end all criminal investigations against VW in Europe, but would not settle shareholder lawsuits.
The new fine was not included in 28.5 billion euros of provisions that VW set aside for the diesel cheating scandal, and would hit earnings, Evercore ISI said.
Volkswagen said it held a board meeting to discuss the crisis with members of the supervisory board also being informed.
Volkswagen’s new Chief Executive Herbert Diess said further steps were needed by the company to overcome its diesel cheating scandal and to restore trust in the company, Reuters reports.
The fine by Braunschweig comes after prosecutors in Munich on Monday widened an emissions cheating probe into Volkswagen’s luxury carmaker Audi to include the brand’s Chief Executive Rupert Stadler among the suspects accused of fraud and false advertising.
