Finance Former Volkswagen bosses to pay as part of firm’s $453 million Dieselgate settlement

Former Volkswagen bosses to pay as part of firm’s $453 million Dieselgate settlement

The Dieselgate settlement needs to be approved at Volkswagen's annual general meeting. Photo: AP
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Volkswagen has agreed to settle claims against former executives, including long-time chief Martin Winterkorn, that will see the car maker receive 288 million euros ($453 million) in compensation related to its emissions scandal.

The settlement came on the same day that Berlin prosecutors charged Mr Winterkorn with giving false testimony to the German parliament when he said he was unaware of the car maker rigging diesel engine tests before it became public.

Mr Winterkorn stepped down as Volkswagen CEO in September 2015, a week after the scandal – in which the group admitted using illegal software to rig US diesel engine tests – broke.

The scandal has cost the company more than 32 billion euros in vehicle refits, fines and legal costs, and spurred it to launch a huge investment in electric cars.

The company initial blamed the scandal on a small number of rogue engineers.

Wednesday’s deal, which consists mainly of a 270 million euro payment from directors’ and officers’ liability insurances, also includes a settlement with former Audi boss Rupert Stadler.

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

A spokesman for Mr Winterkorn declined to comment on the charges brought against him by Berlin prosecutors.

Volkswagen said in late March it would claim damages from Mr Winterkorn and Mr Stadler for breaches of duty of care under stock corporation law.

Volkswagen concluded that Mr Winterkorn had breached his duty of care by failing to fully and swiftly clarify circumstances behind the use of unlawful software functions in some diesel engines sold in North America between 2009 and 2015.

As part of the deal, Mr Winterkorn and Mr Stadler will pay 11.2 million and 4.1 million euros, respectively.

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