Volkswagen's CEO and the company's chairman were formally charged on Tuesday for alleged stock market manipulation related to the carmaker's recent diesel emissions scandal.
Chief Executive Herbert Diess and Chairman Hans Dieter Potsch were also accused by German prosecutors of failing to disclose pertinent information related to the scandal to shareholders in a timely fashion.
According to prosecutors, company executives are required by law to immediately share with shareholders information that may negatively or positively affect stock prices. In this case, the financial risks of the company's involvement in the massive diesel emission scandal were not immediately disclosed as it happened.
Apart from the two executives, prosecutors also filed new charges against the company's former CEO, Martin Winterkorn. This included a 640-page indictment against the former executive. Winterkorn stepped down as CEO of the company after the scandal was made public. He is currently facing multiple fraud charges from both the United States and Germany.
In response to the new allegation, Volkswagen released a statement, which asserts that the new accusations are unfounded and groundless. The company stated that the meticulous investigation into the matter had already been concluded by legal experts over the last four years.
Volkswagen also expressed its support for the two executives stating that it will be holding an extraordinary meeting on Wednesday to discuss the matter.
The company had previously claimed that top executives were actually unaware of the emissions cheating until it was made public in late 2015. However, German prosecutors alleged that the executive actually knew about the practice long before it was made public.
Prosecutors alleged that Winterkorn was the first to have full knowledge of the practice, sometime in May 2015. Both Diess and Potsch were then made aware of the situation sometime in June and July in the same year. Last year, US prosecutors had alleged that Winterkorn was aware of the practice as early as 2014 and had conspired with other executives to allow the cheating to continue.
The charges are the latest in a line of litigations slapped against Volkswagen executives after the company was caught cheating on emissions tests. Volkswagen admitted in 2015 that it had rigged millions of its diesel car models across the globe in order for them to pass diesel emissions tests.
Immediately after the cheating allegations were made public in late 2015, Volkswagen's stock prices dropped by as much as 40 percent. This caused shareholders to lose millions of dollars in the months that followed. Immediate legal action against the company during that time reportedly cost it over $30 billion.
