Former Audi CEO Stadler faces diesel fraud charges in German court

MUNICH -- Former Audi CEO Rupert Stadler arrived in court in Munich on Wednesday to face fraud charges as part of Volkswagen Group's emissions-cheating scandal that was uncovered by U.S. regulators five years ago.

VW and Audi were caught disguising excessive diesel pollution by using illegal engine management software to falsify emissions readings during anti-pollution tests.

The automaker initially claimed the fraud was the work of a handful of engineers, and that no senior managers were involved, but testimony from employees led prosecutors to remand Stadler in custody for four months in 2018.

Stadler is accused of knowingly selling cars that had manipulated engine software and did not comply with environmental standards. Stadler has denied the charges.

Stadler is one of four former Audi executives to face charges. Also appearing before the court are former Audi's former development chief Wolfgang Hatz, ex-diesel engine manager Giovanni Pamio and another former engineer named only as Henning L.

The trial is taking place at Stadelheim prison in Munich, one of Germany’s most famous jails. The hearing was moved there because of the site’s large courtroom that allows for greater social distancing.

Legal arguments are scheduled to take place through the end of 2022.

Direct implications for the company will probably be limited because the trial focuses on individual suspects. VW and Audi agreed to pay fines totaling 1.8 billion euros in 2018 to settle German prosecutors’ claims.

The hearings could still cause unease for VW if comments by witnesses or suspects contradict its defense that its leadership was unaware of the engine manipulation. Evidence that conflicts with those claims would provide fresh ammunition to investors suing VW for allegedly being too slow to inform markets about the massive scope of the scandal.

Bloomberg contributed to this report