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FRANCFORT (Reuters) – A German court said Tuesday that it had opened opposite proceedings to existing and former Volkswagen executives, adding board members on suspicion of handing over maximum reimbursement to union leaders in violation of their fiduciary duties.
The loss of budget is legally a violation of fiduciary duty in Germany.
A regional in Braunschweig, Lower Saxony, where the car manufacturer is located, said it had opened procedures at the request of prosecutors in the region.
Two former members of Volkswagen’s board of directors, as well as existing and previous rate executives, are under investigation, the Braunschweig court said in a statement.
The interviewees were guilty of setting the salaries and bonuses of the members of the works council, the court said, adding that prosecutors believed Volkswagen had probably squandered more than five million euros ($5.9 million) on overpayment for union leaders. between May 2011 and May 2016.
Volkswagen said it saw no crime in the way executives granted reimbursement and bonuses to members of the business committee and said hearings were an opportunity to explain the legal issues about how reimbursement is granted. Volkswagen said the company itself is not under investigation.
In 2016, prosecutors and tax researchers raided the offices of Volkswagen senior to investigate overpayments and tax evasion.
In 2017, Volkswagen said it had cut wages and suspended bonuses for 14 members of the business committee, adding board leader Bernd Osterloh as prosecutors investigated an alleged overpayment.
At the time, Matthias Mueller, Volkswagen’s former executive leader, said wage cuts were a precautionary measure taken until the legality of salary grades was clarified.
(Reporting through Edward Taylor; Editing through Michelle Martin and Edmund Blair)