FRANKFURT -- Volkswagen brand chief Herbert Diess and former VW Group CEO Martin Winterkorn are under investigation over suspected market manipulation related to the automaker's diesel-emissions scandal, reports said.
Diess and Winterkorn are the target of a probe over whether they could have warned of potential financial losses related to the scandal earlier than they did, the news agencies Reuters and DPA said.
The prosecutor's office in Brunswick, Germany, in VW's home state of Lower Saxony, confirmed that Winterkorn is under investigation. It said a current board member also is under investigation but declined to name the executive.
The probe centers on "sufficient real signs" that the company's duty to disclose the possible financial damage of its emissions manipulations may have arisen prior to Sept. 22, 2015 when the carmaker publicly admitted to its wrongdoings, the prosecutor's office said.
The offense of market manipulation carries a penalty of up to five years in prison or a fine. The probe was prompted by charges filed by Germany's BaFin financial regulator.
Current VW Chairman Hans Dieter Poetsch, the company's finance chief at the time, is not being probed, the prosecutor's office said.
'No fresh facts'
VW said the new probe does not provide fresh facts that indicate a possible severe neglect of duty by the accused managers. The company said in a statement that its own legal examinations have not brought to light a clear and severe breach of duty by current or former members of the management board.
The probe adds to the mounting legal woes that weigh on VW. Investors have lodged lawsuits, claiming that the automaker failed to disclose its rigging of emissions tests after it had admitted to U.S. authorities on Sept. 3 it had used so-called defeat devices.
VW acknowledged in its annual report on April 28 that it had not grasped the potential impact of its diesel emissions scandal until last summer when it realized that software in its cars may have violated U.S. environmental law.
"According to the assessment at the time by the members of the Board of Management dealing with the matter, the scope of the costs expected as a result by the Volkswagen Group was basically not dissimilar to that of previous cases in which other vehicle manufacturers were involved, and therefore appeared to be controllable overall with a view to the business activities of the Volkswagen Group," VW's annual report said.
Because similar cases had been resolved amicably with U.S. authorities, the Environmental Protection Agency's Notice of Violation issued on September 18, 2015 came as a surprise, VW said, adding that the "facts and financial consequences then presented the situation in a completely different light."
Winterkorn quit as CEO last September after the company admitted to cheating U.S. emissions tests and disclosed that manipulated software used to rig tests had been fitted in up to 11 million diesel vehicles worldwide.
VW hired Diess, a former BMW development chief, last July to turn around the troubled VW namesake brand.
VW has set aside 16.2 billion euros ($18.4 billion) to pay for legal and other costs, and prosecutors are looking into allegations against 17 individuals potentially involved in the manipulation.
Reuters and Bloomberg contributed to this report