By Ludwig Burger
FRANKFURT (Reuters) - German prosecutors have accused Volkswagen's CEO of holding back market-moving information on rigged emissions tests four years ago, raising the prospect of fresh upheaval at the carmaker just as it tries to reinvent itself as a champion of clean driving.
Prosecutors in the city of Braunschweig said on Tuesday they would press criminal charges of stock market manipulation against Volkswagen CEO Herbert Diess, as well as non-executive Chairman Hans Dieter Poetsch and former CEO Martin Winterkorn.
The charges show how the German company, which in September 2015 admitted using illegal software to cheat U.S. diesel engine tests, is struggling to move on from a scandal which has cost it more than $30 billion in vehicle refits, fines and provisions.
Court proceedings are under way over that admission. The indictment from the prosecutors in Braunschweig - in Volkswagen's <VOWG_p.DE> home region of Lower Saxony - is part of a separate legal push to try managers over an alleged delay in informing investors of the company's wrongdoing.
Lawyers for the three accused said they would contest the charges that they knowingly held back vital information. Volkswagen said its full supervisory board would convene on Wednesday to discuss the indictments.
In a statement issued after an emergency meeting, the board's executive committee said it "cannot see that there was any deliberate attempt not to inform the capital market".
If accepted by a Braunschweig state court, the indictment would lead to a trial date being set.
The former U.S. regulator who helped bring Volkswagen's cheating to light dismissed the company's arguments.
"The excuse that top managers knew nothing is very weak," Alberto Ayala, who served at the California Air Resources Board (CARB) until 2017, told German news magazine Spiegel.
Separately on Tuesday, German prosecutors hit rival carmaker Daimler with an 870 million euro fine for breaking diesel emissions rules. The Stuttgart-based maker of Mercedes-Benz cars said it would not appeal.
Volkswagen this year bucked a trend of falling demand for passenger cars by launching a range of popular sport utility vehicles, and is investing billions to try to become a leader in electric and self-driving technologies.
Its shares were down 2% at 153.42 euros in afternoon trade.
NO HINDRANCE
Diess's lawyer said the indictment would not hinder him in his role as CEO, adding that as Diess did not join Volkswagen until July 2015 he could not have foreseen the scandal would have such a huge impact on the company.