Porsche Fined $598 Million for its Role in the ‘Dieselgate' Emissions Scandal
German automaker Volkswagen Group is eager to put the dieselgate scandal behind it and move on. However, German prosecutors continue to levy fines against the automaker for its role in the emissions cheating scandal nearly four years ago.
German prosecutors imposed a 535 million euro ($598 million) fine on Porsche AG for its lapse in oversight allowed the emissions cheating to go on unchecked. Porsche is a unit of Volkswagen along with luxury line Audi.
Prosecutors said Porsche did not appeal the findings by the prosecutor. Along with Volkswagen, Porsche and Audi also sold diesel engine vehicles which failed to conform to clean air rules and cheated emissions tests.
Porsche agreed to pay the fine and said that prosecutors' proceedings against the company had come to an end.
Prosecutors in Stuttgart said that the company's development department had neglected its legal obligations, which ultimately led to the sale of diesel cars that spewed harmful emissions.
The fine against Porsche follows a $1.12 billion penalty for management lapses imposed against Volkswagen by prosecutors in Braunschweig, as well as a fine of 800 million euros against Audi by prosecutors in Munich last year.
German prosecutors also targeted individual engineers and took action against the companies for lack of oversight because managers failed to prevent heavily polluting cars from hitting European roads.
The fine does not hinder ongoing proceedings against individuals involved in Porsche's diesel manipulations while working at the automaker, the prosecutors added.
Prosecutors filed aggravated fraud charges last month against Martin Winterkorn, the former chief executive of Volkswagen who led the company when it deceived regulators about its vehicles' diesel exhaust levels. The charges were the first criminal indictment in Germany against an individual in connection with the diesel scandal.
In June 2018, Audi CEO Rupert Stadler was detained in Germany because of concerns he could influence witnesses in an ongoing fraud investigation. Stadler was the highest ranking Volkswagen executive to be arrested in connection with the dieselgate scandal.
The 2015 "dieselgate" emission scandal rocked the Germany's auto industry, with Volkswagen admitting to tampering with emission control software that it installed in hundreds of thousands of diesel-powered vehicles destined for the U.S. and European markets. The software was designed to falsify emissions whenever a vehicle was undergoing smog testing in order mask actual emission readings.
As a result of its guilty plea, Volkswagen Group paid approximately $25 billion in penalties and fines in the U.S. It also had to buy back all of the diesel-powered vehicles affected. Thousands of these vehicles are being stored at a site in Southern California.
Volkswagen's current CEO Herbert Diess, acknowledged at a press conference last year that Volkswagen had "lost a great deal of trust," as a result of the emissions cheating scandal and that it would take years to restore public confidence in the automaker.
In the fall of 2018, Porsche announced its complete withdrawal from building diesel models and will focus instead on the development of cutting-edge gasoline engines, high-performance hybrid powertrains and fully-electric models.
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