LONDON: How Volkswagen's bosses spent 17 days in September is the latest question to vex its shareholders. Financial watchdog Bafin is calling for a criminal investigation into whether the German carmaker's former management waited too long before admitting it had been caught cheating US emissions tests.
It's particularly uncomfortable for the company's chairman, Hans Dieter Poetsch, who in any case is the wrong man for the job. VW admitted to US regulators on Sept. 3 that it had fudged test data, but made the misconduct public only on Sept. 20.
In the following week, VW's market capitalisation fell by almost 24 billion euros. Shareholders have already launched lawsuits against VW for alleged violations of its disclosure duties. Now prosecutors are investigating former boss Martin Winterkorn and a second unnamed executive.
The probe could reach VW's Chairman Hans Dieter Poetsch and Chief Executive Matthias Mueller too.
Both were members of VW's executive board at the time, and all members of a company's executive board are jointly liable for corporate misconduct in Germany.
Poetsch may be particularly exposed. As Volkswagen's finance director until October 2015, communication with markets was one of his key tasks.
The legal risk itself might not be the main issue.
The bar for proving market manipulation in Germany is high, though it does happen. In 2010 the former boss of IKB Bank was convicted for issuing a misleading press release that disguised the bank's stricken state. Porsche executives were acquitted of issuing misleading statements during an epic takeover battle for VW in 2008.
Moreover, VW claims that it and its legal advisors initially underestimated the potential financial fallout of the emissions scandal.
Bafin's move puts Volkswagen's poor governance back on the spot, though.
As a former member of the management board, Poetsch never looked like the right man to supervise the investigation and lead the carmaker in a fresh start.
The supervisory board on June 22 said it could claim damages against current and former top managers - as Siemens did after its 2006 bribery scandal.
In VW's case this would mean Poetsch had to sue himself. The case for having an outsider at the top gets ever stronger.
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