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Volkswagen told to pay $4.3-billion fine in emissions cheating case

A US federal court charged six former executives of the German automaker with fraud in connection with the 2015 matter.

A federal court in Washington indicted six Volkswagen executives and imposed a penalty of $4.3 billion (Rs 28,000 crore approximately) on the company on Wednesday in connection with the 2015 emissions cheating scandal. This is the highest fine imposed by the government on any automaker, reported Associated Press. In 2014, Toyota was levied a $1.2-billion (Rs 7,000 crore approximately) penalty in a safety issues case.

Besides, Volkswagen has agreed to appoint an independent monitor to supervise control measures over the next three years. The government said that although Volkswagen had publicly admitted to the fraud on September 18 last year, its employees continued to delete computer files and other proof. “Volkswagen obfuscated, they denied and they ultimately lied,” said Attorney General Loretta Lynch.

Company employees have been asked to cooperate with ongoing investigations. The United States Justice Department said at least 40 Volkswagen employees were involved in destroying evidence of the fraud. More employees could be arrested in the coming days.

The six employees indicted include a former head of development of the Volkswagen brand and the head of engine development. While Oliver Schmidt, one of the six convicts, was arrested in Florida, last week, the others are likely in Germany, reported The New York Times.

The company has terminated several top executives after the scandal came to the fore, reported Washington Post. However, a company spokesperson refused to comment on the employment status of the six indicted employees.

The German automaker had fitted as many as six lakh cars in US with a software to fool emissions tests. Investigators said that the cars emitted more than 40 times the legal limit of nitrogen oxide.

Emissions discrepancies in Volkswagen cars were first identified in 2014 during a research conducted by West Virginia University. The case came to light in August 2015 when a company employee defied supervisors and informed US regulators about the software.

Wednesday’s verdict brings Volkswagen’s total fines to around $20 billion (Rs 1,33,000 crore approximately), reported Washington Post. In June last year, Volkswagen had reached a deal with US regulators to pay up to $14.7 billion (nearly Rs 9.98 lakh crore) and compensate owners of vehicles affected by its diesel emissions cheating scandal.

The German automaker had said it would either repair or buy back polluting vehicles and pay each owner $10,000 (approximately Rs 6.8 lakh). The deal set aside $10 billion to repair or buy back around 4,75,000 polluting Volkswagen vehicles and to compensate each owner with an additional payment of between $5,100 (approximately Rs 3.5 lakh) and $10,000.

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HBX Platform | Courses offered in the HBX CORe program
HBX Platform | Courses offered in the HBX CORe program

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HBX Interface | Students can view profiles of other students in their cohort
HBX Interface | Students can view profiles of other students in their cohort

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HBXers at ConneXt, with Prof. Bharat Anand
HBXers at ConneXt, with Prof. Bharat Anand

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