Volkswagen bosses avoid market manipulation trial with 9 million euro settlement: Company

Volkswagen chief executive Herbert Diess and supervisory board chief Hans Dieter Poetsch have avoided trial over "market manipulation" allegations with an out-of-court settlement of nine million euros, the German car giant said Tuesday.

"According to the assessment of the supervisory board, it is in the best interest of the company for the proceedings to be terminated," VW said.

It therefore agreed to pay 4.5 million euros to settle the charges against each of the top executives, it said.

The case had been one of many legal entanglements that Volkswagen had found itself in over its stunning revelation in 2015 that it had installed devices in 11 million diesel vehicles worldwide to make them seem less polluting when they were undergoing emission tests.

Dubbed Dieselgate, the cheating scandal sank Germany's once vaunted auto industry into one of the biggest crises in its existence.

German prosecutors in September charged the two VW bosses, along with former chief executive Martin Winterkorn, with "market manipulation".

Prosecutors argued that the VW chiefs should have informed shareholders about the investigation into the so-called defeat devices as soon as they learnt of it, not wait until US authorities dropped the bombshell news on September 18, 2015, sharply driving down the VW share price.

In their statement on Tuesday, Volkswagen's board said that "both at the time of the indictment... and today, the criminal law advisors and representatives of the company asserted that the accusations of the public prosecutor's office against Mr. Poetsch and Dr. Diess are not founded."

Diess has run the entire group -- which include the Audi, Porsche and Skoda brands -- since April 2018, but joined the board as Volkswagen brand chief in July 2015.

Winterkorn was at the controls from 2007 to 2015, stepping down soon after the scandal broke.

In April last year, he was charged with serious fraud, unfair competition and breach of trust by prosecutors in Brunswick, alongside four other suspects.

His lawyers have reiterated that he is "blameless in this matter" and "will continue defending himself".

The dieselgate scandal shook Volkswagen to its foundations, and with it Germany's flagship car sector, a pillar of the economy that employs around 800,000 people.

It has cost VW more than 30 billion euros ($33 billion) in fines, legal costs and compensation payments to car owners -- the vast majority in the United States.

Late April, the group settled Germany's biggest lawsuit in an out-of-court settlement in which it agreed to pay around 750 million euros in compensation to some 235,000 customers, or between 1,350 and 6,250 euros per car.

But the group remains entangled in a web of legal woes, including a case from investors in Germany who have joined forces to demand billions of euros in compensation over VW's steep share price plunge in the days after the scandal became public knowledge.