[blackwasp]

Volkswagen's former CEO Martin Winterkorn along with five others have been charged over a conspiracy to mislead regulators in USA over the emissions from diesel cars. Last month Porsche's head of powertrains, Joerg Kerner was arrested for the same.

According to the indictment that was unsealed recently, the former CEO knew about the cheating sometime between May 2014 and July 2015. Further, the report states that he willingly agreed along with other executives to continue with the cheat device in their diesel cars. In an emergency meeting conducted on July 27, 2015 in Germany, a presentation was made that revealed how the company had fooled the authorities so far and how it would continue at it. The report also alleges that Winterkorn asked his subordinates, including Oliver Schmidt, to not disclose this to the authorities at the same meeting. Oliver Schmidt was jailed for 7 years and a fine of USD 4,00,000 was imposed on him by a US judge last December.

Wolfgang Hatz - former Research & Development Head at Porsche, was arrested in Munich over his role in the emissions scandal in October 2017. Back in 2015, Volkswagen had admitted to cheating the emission norms by fitting a device that could detect when a vehicle was undergoing testing.



Link to the Team-BHP News

[i74js]

I fail to understand why companies / brands are being punished when the issue is with individual's integrity.

Any investor in VW; small or large would have never agreed to cheat. They have invested in a brand basis its success to produce and sell reliable & efficient machines without going against the law.

At the end, individuals behind this fraud are being punished without hedging the company / brand from the wrongdoings.

On the contrary when bankruptcy is filed, companies collapse whereas individuals / executives are hedged. Why these executives are not taken to task as they are the reason behind failure / losses.

This is ridiculous !!

[lamborghini]

Originally Posted by i74js

I fail to understand why companies / brands are being punished when the issue is with individual's integrity.

Any investor in VW; small or large would have never agreed to cheat. They have invested in a brand basis its success to produce and sell reliable & efficient machines without going against the law.

At the end, individuals behind this fraud are being punished without hedging the company / brand from the wrongdoings.

On the contrary when bankruptcy is filed, companies collapse whereas individuals / executives are hedged. Why these executives are not taken to task as they are the reason behind failure / losses.

This is ridiculous !!

IMO, I think it is fair.
These executives are company representatives, employed by the investor to carry out & over see the operations of the company, hence their actions have to have an effect on the brand overall & the investors.
Also, many of these executives are also offered stock options in the companies as an incentive.

What is lacking though is a strongly enforced ethics policy, which is what I feel investors need to start working towards and ensuring it is met with full compliance.

[Nikhilb2008]

I know, this is a different topic, more suited to the Shifting Gears section, but it amuses me that the US and government around the world are so hell bent on meting out justice to these executives while they allow multinational food companies to go on pumping their citizens full of poison and sugar!

I dont mean to say that they should forgive or stop pursuing these people who did contribute to worse health thanks to their cheat devices, but I wish some serious guidelines are issued about the dangers of processed food as well.

Of course, taking such serious action is also meant to be seen as setting an example and hopefully dissuading other companies from trying to cheat consumers in the future.

[sxenimit]

Originally Posted by Nikhilb2008

I know, this is a different topic, more suited to the Shifting Gears section, but it amuses me that the US and government around the world are so hell bent on meting out justice to these executives while they allow multinational food companies to go on pumping their citizens full of poison and sugar!

I dont mean to say that they should forgive or stop pursuing these people who did contribute to worse health thanks to their cheat devices, but I wish some serious guidelines are issued about the dangers of processed food as well.

Of course, taking such serious action is also meant to be seen as setting an example and hopefully dissuading other companies from trying to cheat consumers in the future.

As far as I can tell, they cheated the system and hence due to their fraud, the people suffered. While you can talk about processed food, no one is being forced to buy it. They are following all the guidelines. You can talk about increasing the guidelines but so far, they're not breaking any laws, nor people are being forced fed. People buy it cause they like it.

You're comparing Apples to Oranges. People already know processed food is not good. Every food manufacturer has to write down what is exactly in their foods. Not to mention, that is the job of Congress and not the Justice Department which functions differently. US Government is huge.

The main reason for this is to set a precedent. Hopefully companies in the future defer from doing such shady business.

[mohaks19]

Originally Posted by Nikhilb2008

I dont mean to say that they should forgive or stop pursuing these people who did contribute to worse health thanks to their cheat devices, but I wish some serious guidelines are issued about the dangers of processed food as well.

Of course, taking such serious action is also meant to be seen as setting an example and hopefully dissuading other companies from trying to cheat consumers in the future.

The DOJ and Treasury department have experienced massive outrage over bailing out bulge bracket banks after the 2008 mortgage crisis and ever since, the department has made a conscious effort to make an example out of executives involved in any kind of wrongdoing (for instance: increase in insider trading scrutiny by the SEC after 2008). Furthermore, Volkswagen not being a U.S. based company provides the DOJ leverage to charge the group with stricter penalties compared to its U.S. counterparts (in a similar hypothetical scenario) which have a massive effect on the equity markets in the US.

Moreover, as many people mentioned above, despite FDA's strict guidelines, most healthcare and processed food companies comply with the rules before rolling out their products in the market, hence, the correlation within the arguments isn't really relevant imo. But nonetheless, the DOJ has definitely taken a much more lenient stance against healthcare and food processing companies in the U.S. (check out Martin Shkreli and his company Retrophin's 2000% price hike of tiopronin drug, which did not result in any kind of government scrutiny).

[Venkatesh]

German Prosecutors Charge 15 more Volkswagen Executives in Diesel Emissions Scandal.

The suspects are accused of aiding and abetting fraud in combination with tax evasion, indirect false certification and criminal advertising.

The trail of Winterkorn and other managers postponed until September.

Source