VW chairman faces questions in bribery caseFerdinand Piëch, chairman of Volkswagen, will Wednesday face tough questions in a German court over whether he had been aware of a huge bribery scandal at the carmaker that occurred while he was its chief executive from 1993 to 2002.
The courtroom appearance of one of Germany’s most powerful business patriarchs marks a turning point in a long-running investigation into the perks-and-prostitutes affair that rocked Europe's largest carmaker in 2005 and that has already led to a guilty verdict against Peter Hartz, Mr Piëch's former personnel chief.
Although Mr Piëch has only been called as a witness, his comments could lead to a legal probe against him, prosecutors said, if it emerges that he knew of the wrongdoing by his staff.
VW has maintained that the illegal activities were restricted to a few isolated individuals.
Mr Piëch – who as chief executive nurtured the reputation of knowing the finest of details of the company’s operations – has denied knowledge of the bribes.
He is due to give evidence in the case against Klaus Volkert, former head of VW’s works council, who is charged with receiving €2.5m ($3.7m) in illegal payments from the company. Also on trial is Klaus-Joachim Gebauer, a former VW personnel officer who allegedly co-ordinated the payments to Mr Volkert.
Mr Hartz was found guilty in a separate trial last year of endorsing the €2.5m illegal payments to Mr Volkert between 1995 to 2004 in order to maintain good employee relations.
Mr Piëch will have to tackle questions from prosecutors keen to know if top management knew of the payments, and from the lawyers of the two defendants, who believe their clients could get milder sentences if they were seen as not acting on their own. Mr Volkert’s lawyer is set to confront Mr Piëch with a letter dated May 11 1998 and signed by Mr Piëch and Mr Hartz that confirms a big rise in pension entitlements for Mr Volkert. The letter, marked confidential, is not evidence of wrongdoing, but could indicate awareness of illegal payments, observers said.
VW said it had been “surprised” when the letter was presented to the court last year as it was not in Mr Volkert’s official personnel file. VW did not doubt its authenticity, however, the company added.
