June 20, 2018 / 3:16 PM / 5 months ago

Audi's detained CEO questioned by prosecutors over emissions scandal: source

MUNICH (Reuters) - Munich prosecutors questioned Audi’s arrested Chief Executive Rupert Stadler about a global diesel-cheating scandal on Wednesday, a person familiar with the matter told Reuters.

FILE PHOTO: Audi CEO, Rupert Stadler arrives for the company's annual news conference in Ingolstadt, Germany, March 15, 2017. REUTERS/Lukas Barth/File Photo

Stadler, who was arrested on Monday and is being held at a prison in the southern German city of Augsburg, spoke with investigators in the presence of his lawyer, the source added.

Prosecutors and Stadler’s lawyer did not comment on the nature of their discussion. Stadler himself was not reachable for comment.

Audi (NSUG.DE), the premium brand of carmaker Volkswagen Group (VOWG_p.DE), has said Stadler should be presumed innocent until proven otherwise.

Munich prosecutors are investigating him for suspected fraud and false advertising in connection with emissions test cheating by Audi - part of the broader “dieselgate” scandal that has engulfed Volkswagen (VW) since 2015.

They remanded Stadler in custody on Monday to prevent him from obstructing their probe.

Stadler on Tuesday temporarily stepped down from his position as CEO of Audi and as a member of VW’s management board. Audi named Abraham Schot as interim CEO.

Stadler has been under fire ever since Audi admitted to using cheating software in November 2015 - two months after VW - but has enjoyed backing from members of the Porsche and Piech families who control VW and Audi.

The technique of using software to detect a pollution test procedure, and to increase the effectiveness of emissions filters to mask pollution levels during tests, was first developed at Audi.

“In designing the defeat device, VW engineers borrowed the original concept of the dual-mode, emissions cycle-beating software from Audi,” VW said in its plea agreement with U.S. authorities in January 2017, in which the company agreed to pay a $4.3 billion fine to reach a settlement with U.S. regulators.

VW has insisted the development of illegal software, also known as “defeat devices”, was the work of low-level employees, and that no management board members were involved.

U.S. prosecutors have challenged this by indicting VW’s former CEO Martin Winterkorn. Investigations in Germany are continuing.

Reporting by Joern Poltz; Writing by Edward Taylor; Editing by Sabine Wollrab and Mark Potter

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