Fiat sites across Europe have been raided as part of an investigation into diesel emissions.
Industrial offices belonging to Fiat Chrysler (FCA) and CNH Industrial were searched on Wednesday in Germany, Italy and Switzerland as part of a probe initiated by German prosecutors investigating emissions fraud.
Engines used in Fiat, Alfa Romeo and Jeep vehicles, as well as in CNH Industrial's Iveco trucks, have been found to contain potentially illegal engine management software to mask excessive emissions, prosecutors said.
The Frankfurt prosecutor's office stopped short of naming Alfa Romeo and Fiat's parent company, Fiat Chrysler, as under German law only individuals, not companies, can be prosecuted.
The investigation is focused on nine individuals working at an "international carmaker" and seeks to establish their role in putting cars equipped with potentially illegal emissions software on public roads, the prosecutor's office said.
A spokesman for FCA said that a number of the group's offices in Europe were visited by investigators in the context of a request for assistance by magistrates in Germany, and added it was co-operating fully with the authorities.
In a statement CNH Industrial also confirmed authorities had visited its premises.
FCA and CNH Industrial are both controlled by Exor, the holding company of Italy's Agnelli family.
Potentially illegal software has been detected in the 1.3 litre and 1.6 litre Multijet engines used in Alfa Romeo, Jeep and Fiat engines as well as in commercial diesel engines used in Iveco and Fiat commercial vehicles, the prosecutors said.
Although these cars passed pollution tests in a laboratory, the cars used software to largely switch off exhaust emissions filtering while driving on the road, they added.
The investigation, which was co-ordinated by the EU justice agency Eurojust, focuses on nine people living in Italy and their activities from 2014 to 2019, they said.
“While vehicles complied with NOx [nitrogen oxides] limits in the testing mode, the defeat devices are assumed to turn off the exhaust cleaning in real driving,” prosecutors said.
“The use of such defeat devices is banned” under EU rules.
Cars with such equipment cannot be approved anywhere in the bloc, and owners risk driving bans or losing permission to use them, the prosecutors said.
While the car models have been certified by Italian regulators, prosecutors are not bound by that finding and can review the issue on their own.
Prosecutors say more than 200,000 vehicles are affected in Germany.
The raids come almost five years after a US investigation became public into Volkswagen AG over the use of so-called defeat devices in its engines.
While VW and Daimler AG have settled criminal investigations, Wednesday’s raids show that authorities have not yet put the issue aside.
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
