(FinancialPress) — The frontman of luxury carmaker Audi has been arrested in Germany. The CEOs apprehension is related to the emissions test cheating scandal of 2015.
The Munich prosecution office stated on Monday that Rupert Stadler was apprehended due to concerns over the possibility of evidence tampering. The investigation involves both Audi and its parent company, Volkswagen. Stadler has been a part of the Volkswagen workforce since 1990.
The detained 55-year-old CEO is the highest-ranking company exec to be detained as part of the ongoing investigation. The scandal first came to public attention 3 years ago.
Nicolai Laude, a spokesman for Volkswagen, confirmed the arrest. “The principle of the presumption of innocence continues to apply to Mr. Stadler,” he said. While no further comment was given, he did reveal that the matter would be discussed in Monday‘s board meeting.
VW shares dropped 2.77% in the Frankfurt exchange.
Prosecutors searched Stadler‘s home as part of the investigation last week as part of an ongoing, undisclosed investigation. .
Furthering the fallout is Germany‘s imposition of a imposed a €1 billion ($1.2 billion) fine on the carmaker, after it was found to have rigged diesel engines to give off false results in emissions tests.
The company first admitted to its own foul play in 2015. They had rigged millions of units to cheat the tests.
Volkswagen first admitted in 2015 it had rigged millions of diesel engines to cheat on emissions tests. They used software that made emissions look less pollutant than they actually were.
After the issue was made public, the company‘s stock price plummeted, as did the industry‘s faith in diesel technology. Adding up fines, penalties, settlements and recalls, the event has cost Volkswagen well over $30 billion.
The fallout has already cost Volkswagen two CEOs. Martin Winterkorn held the position when the news came to light, and was swiftly indicted by American prosecutors on grounds of wire fraud and conspiracy to defraud American customers.
His successor, Matthias Mueller, shortly replaced Winterkorn but stepped down shortly after. He was subsequently replaced by Herbert Diess.
Diess has admitted that it will take years to regain public trust in the company.