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Volkswagen chief faces grilling by board over diesel scandal

(Agencies) Updated: 2015-09-23 21:29

Volkswagen chief faces grilling by board over diesel scandal

Volkswagen AG's Chief Executive Officer Martin Winterkorn attends the company's annual news conference in Stuttgart, Germany, in this October 19, 2010 file photo.[Photo/Agencies]

BERLIN - Volkswagen Chief Executive Martin Winterkorn faced a reckoning with his board on Wednesday, summoned to explain the falsification of US emissions tests in the biggest scandal in the 78-year history of the world's largest carmaker.

A source close to the company said a five-member executive committee was grilling Winterkorn at the company's headquarters in Wolfsburg, Germany, and was likely to make a recommendation on his future ahead of a full board meeting on Friday.

Volkswagen is under huge pressure to act, with its shares down more than a third in value since the crisis broke, and the bad news still coming.

German prosecutors said on Wednesday they were conducting a preliminary investigation into the manipulation of vehicle emission test results at Volkswagen, while French Energy Minister Segolene Royal said her country would be "extremely severe" if its investigation into the firm found any wrongdoing.

German Chancellor Angela Merkel has urged Volkswagen to move "as quickly as possible" to restore confidence in a company held up for generations as a paragon of German engineering prowess.

But the board is in a tricky situation, with the 68-year-old CEO showing no sign of resigning after a hitherto highly successful eight year reign which saw the company double its sales and almost triple its profits. Volkswagen passed Toyota in the first half of this year to become the world's top selling car maker.

"VW needs a fresh start and in our view a new CEO," said Evercore ISI analyst Arndt Ellinghorst.

A story in the Tagesspiegel newspaper, denied by Volkswagen, said the board would replace him with Matthias Mueller, head of the automaker's Porsche sports car business.

Winterkorn, who was due to have his contract extended at Friday's board meeting, did not mention his future in a video message posted on the company's website on Tuesday, in which he repeated his apology for a scandal which has wiped out tens of billions of dollars from the company's value.

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