Monday June 20, 2016 Hi All: Not quite noteworthy with regards to the VW emissions non-compliance problem and its fix, German prosecutors are now investigating former VW CEO Martin Winterkorn and another unnamed executive over allegations they didn’t inform investors soon enough about the company’s scandal over TDI vehicles rigged to cheat U.S. emissions tests. Matthias Diekman, a Braunschweig prosecutor spokesman, said in the statement that a probe was opened at the behest of Germany’s Federal Financial Supervisory Authority, the country’s financial watchdog. Why? German market law requires publicly traded companies to alert investors as soon as they have unforeseen developments that could affect a decision to buy or sell the stock. Prosecutors said that VWs notification on Sept. 22 was long after the required disclosure obligation should have occurred. Volkswagen stated Winterkorn was sent a memo as early as May 23, 2014, about emissions irregularities uncovered by an environmental group, but the company was not sure he saw it, and said that top officials discussed the matter long after on July 27, 2015. The company believed that to be the case could be resolved with little cost up though early September 2015, just weeks before the U.S. EPA issued a violation notice. With that notice, VW realized that financial risks were going to be far more onerous and issued an investor advisory four days later. The prosecutors’ news release said that the second employee is not the current board of directors’ chairman, Hans Dieter Poetsch. Poetsch, CFO under Winterkorn, but has since left that post. Volkswagen has stated previously in response to an investor lawsuit that it met its disclosure obligation and has set aside over $18 billion USD to deal with the costs of recalls and fixes. Volkswagen plans to submit a $10 billion settlement in the U.S. by a June 28 court deadline, although insiders are stating it may not yet have a working retrofit for the hundreds of thousands of TDI vehicles sold between the years in question. VW AGs Reply The initiation by the Braunschweig public prosecution service on June 17, 2016 of investigation proceedings against two members of the former Board of Management only became known to Volkswagen AG immediately before today's publication of the corresponding press release. Today's press release from the Braunschweig public prosecution service does not cite any new facts or information on any serious breaches of duty by the members of the Board of Management now accused. Volkswagen AG's recommendation to the Annual General Meeting concerning formal approval of the actions of the Supervisory Board and Board of Management is based on information currently available from the comprehensive although not yet concluded investigation into the diesel matter by the independent investigator, U.S. law firm Jones Day. On this basis, law firm Gleiss Lutz carried out a comprehensive legal review, which has been confirmed by Professor Wulf Goette (retired chief justice at the German Federal Court of Justice). The Board of Management similarly obtained the advice of law firm CMS Hasche Sigle. In both of these legal reviews, according to information currently available, no serious and manifest breaches of duty on the part of any serving or former members of the Board of Management have been established that would stand in the way of granting formal approval at this time. This is the basis for the recommendation concerning formal approval. As has been planned for some time, the Supervisory Board and the Board of Management will once again obtain legal advice from the aforementioned law firms prior to the Annual General Meeting concerning whether there is any new information to be taken into account with regard to formal approval of the actions of the members of the Board of Management and Supervisory Board for fiscal year 2015.