German auto supplier Continental pays ‘dieselgate’ fine

BERLIN (AFP): German auto supplier Continental said Thursday it had agreed to pay a 100-million-euro ($107-million) fine to settle legal proceedings against it linked to Volkswagen’s emissions-cheating scandal.

The fine was due to a “negligent breach of supervisory duties” in relation to the supply of engine control units and engine control unit software, Continental said in a statement.

The company, which makes tyres and supplies components and software for carmakers, became embroiled in the so-called “dieselgate” scandal as it was a supplier to German auto giant Volkswagen.

Ten-brand Volkswagen — which makes models including Audi, Porsche and Seat — admitted in 2015 it had installed software to rig emissions levels in 11 million diesel vehicles worldwide.

Public prosecutors in Hanover targeted Continental’s former “powertrain” division, which was spun off to form Vitesco in 2021.

Following discussions with prosecutors and a review, Continental said it had accepted the fine and would not be appealing.

“It is important and in our own interests that we draw a line under the fine proceedings,” said Continental board member Olaf Schick.

The fine will not have a significant impact on earnings in the 2024 financial year as funds had been set aside to cover any potential penalty, Continental said.

When Vitesco was spun off, it was agreed that the new company would “indemnify Continental against the ensuing costs and liabilities” — meaning it will ultimately be responsible for paying the fine.

Criminal proceedings against former Continental employees are still ongoing, the Hanover prosecutors added.

The “dieselgate” saga is seen as Germany’s biggest post-war industrial scandal. It has cost VW around 30 billion euros in fines, legal costs and compensation to car owners, mainly in the United States.

Former Volkswagen CEO Martin Winterkorn is due to go on trial in September for his role in the scandal.