Porsche fined Dh2bn over 'dieselgate'

Volkswagen unit agrees to pay and end investigation by Stuttgart prosecutors

Porsche Festival in Cannes. German prosecutors fined the firm €535 million. EPA

Volkswagen’s Porsche unit agreed to pay €535 million (Dh2.19bn) to end an investigation by Stuttgart prosecutors into the diesel-rigged engines used in its sports cars.

The car maker accepts the fine, which was part of an ongoing criminal investigation into "dieselgate" targeting managers who worked at the Porsche brand, the Stuttgart prosecutors office said on Tuesday. The penalty covers the sale of cars since 2009 that were equipped with V6 and V8 engines from VW’s Audi, according to Bloomberg.

The Porsche brand itself never developed diesel engines but its managers failed to properly supervise their use in the vehicles, leading to the investigation, Volkswagen’s sports car unit said on Tuesday. Volkswagen added a provision for the fine in the first quarter and the unit will book the impact in the second quarter.

With the settlement, Volkswagen completes its deals with German prosecutors over the sale of rigged cars. VW last year settled with Braunschweig investigators for €1 billion under the same kind of proceedings and its Audi unit followed by paying €800m to Munich prosecutors. VW said last week the overall impact of the diesel issue has now reached €30bn.

US authorities disclosed Volkswagen's systematic emissions cheating on September 18, 2015, sparking the biggest business scandal in the company's history.

German prosecutors have pursued individual engineers and took action against VW, Porsche and Audi for lack of oversight because managers failed to prevent heavily polluting cars from hitting European roads, Reuters said.

Prosecutors said Porsche had not appealed the findings by the prosecutor.

Porsche confirmed the fine and said that prosecutors' proceedings against the company had come to an end.

The fine does not hinder ongoing proceedings against individual people in relation to Porsche's diesel manipulations, the prosecutors added.