June 21, 2016 / 10:37 AM / 3 years ago

VW supervisory board backs endorsement of former top managers: source

BERLIN (Reuters) - Volkswagen’s (VOWG_p.DE) supervisory board on Tuesday stood by its recommendation that top management’s actions be endorsed by shareholders, a person familiar with the matter said, even as German prosecutors launched a new probe against a current and a former top executive.

A VW sign is seen outside a Volkswagen dealership in London, Britain November 5, 2015. REUTERS/Suzanne Plunkett/File photo

Volkswagen’s supervisory and management boards on May 11 recommended that shareholders ratify actions taken by the management board in 2015, since an investigation of the carmaker’s emissions scandal had until then failed to uncover potential wrongdoing by senior managers.

The two boards said at the time that the proposed resolution was based on the condition that management board members were not implicated in wrongdoing.

But prosecutors in Braunschweig, near VW’s Wolfsburg headquarters, are now investigating former VW CEO Martin Winterkorn and VW brand chief Herbert Diess over whether they effectively manipulated markets by delaying the release of information about the firm’s emissions test cheating.

VW’s supervisory board on Tuesday discussed at length the question of whether it should stand by its May 11 resolution, the person said, declining to be identified because board deliberations are confidential.

A day before Europe’s largest automaker is to hold its annual shareholders meeting, the board has chosen to back the recommendation because internal investigations of the scandal until now have shown that no former management board member was in serious breach of duties in 2015, the person added.

Even Diess, the former BMW (BMWG.DE) development chief who was hired by VW last July to turn around the troubled brand, has the backing of the supervisory board despite the probe, the person said.

Volkswagen did not return calls seeking comment.

Earlier on Tuesday, a source close to the supervisory board said the 20-member panel may back away from its recommendation after the latest regulatory probes.

Germany’s financial watchdog has called on Braunschweig prosecutors to investigate VW’s entire former management board over the time it took to disclose the emissions test cheating, another person familiar with the matter told Reuters on Tuesday.

Reporting by Andreas Cremer and Jan Schwartz; Additional reporting by Jonathan Gould and Ilona Wissenbach; Editing by Georgina Prodhan and Dan Grebler

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