US authorities allege over $18 billion in bonds were raised when company was actively trying to cover up the Dieselgate affair.
The US Securities and Exchange Commission (SEC) have filed a civil complaint against Volkswagen and Martin Winterkorn, its former CEO, for their role in issuing bonds while the company was trying to conceal the fact it had been selling vehicles with diesel emissions many times above legal levels.
According to the SEC: “From April 2014 to May 2015, Volkswagen issued more than US$13 billion ($18.4 billion) in bonds and asset-backed securities in the US markets at a time when senior executives knew that more than 500,000 vehicles in the United States grossly exceeded legal vehicle emissions limits.”
The commission claims the automaker “reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company”.
In a prepared statement, Stephanie Avakian, co-director of the SEC’s enforcement division, said: “Issuers availing themselves of American capital markets must provide investors with accurate and complete information.
“As we allege, Volkswagen hid its decade-long emissions scheme while it was selling billions of dollars of its bonds to investors at inflated prices.”
The SEC filed its complaint with the US District Court in northern California late last week, and has charged Volkswagen AG, Volkswagen Group of America Finance, VW Credit, and Winterkorn.
It is seeking repayment of “ill-gotten gains” with interest, civil penalties, and a bar on Winterkorn serving as an officer or director of a company.
Winterkorn resigned as CEO in late September 2015, just days after the Dieselgate saga become public knowledge. He has been charged by US authorities, but will likely be tried in absentia as he resides in Germany, and the country has a long established policy of not extraditing its own citizens.
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