Volkswagen Gets Hit With Fines Totaling $33bn Over Audi Diesel Engine Cheat

Volkswagen Gets Hit With Fines Totaling $33bn Over Audi Diesel Engine Cheat

 

Volkswagen has been hit with a new fine connected to its cheating on diesel engine emissions tests related to its Audi subsidiary. The fine has moved its overall penalties to $33 billion.

Volkswagen admitted in 2015 to cheating on clean air rules with software that made emissions look less toxic than they actually were.

Munich prosecutors on Tuesday imposed a fine of €800 million ($926 million) on Audi, taking the total cost to the Volkswagen Group globally to €28.2 billion ($32.7 billion). That includes fines and other penalties, payments to authorities and the cost of compensation and retrofitting vehicles, according to a company spokesperson.

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The fines are equivalent to 12% of Volkswagen’s annual sales last year and more penalties seem likely with shareholders in Germany who are now claiming the company misled them. They’re demanding more than €9 billion ($10.4 billion) in damages.

Volkswagen said Tuesdays the fines will impact earnings this year and reveals it has no plans to contest the fine.

‘As a negative special item, [it will] reduce the group earnings for the fiscal year 2018 accordingly,’ it said in a statement.

While the fines end the Munich’s prosecution investigation into Audi, investigations into its executives including CEO Rupert Stadler will continue., the prosecutor said.

The €800 million fine comprises a €5 million penalty for administrative offenses and a €795 million payment for profits made from cheating.

This case involved five million affected cars by the Volkswagen group in Europe and the United States. It specifically concerned V6 and V8 diesel engines manufactured by Audi and installed in Audi, Volkswagen, and Porsche brands, and Audi vehicles equipped with EA 189 and EA 288 engine made by Volkswagen.

Shares in Volkswagen (VLKAF) and Audi (AUDVF) were trading higher on Tuesday. Volkswagen stock is down 11% so far this year

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