Volkswagen AG’s (ADR) (OTCKMKTS:VLKAY) Ex CEO, Martin Winterkorn has now given up his position as CEO of Volkswagen’s luxury brand: PORSCHE AUTO ADR (OTCMKTS:POAHY), which has a major stake in the German automaker.
Earlier on, Mr. Winterkorn gave up his position as CEO of Volkswagen, as a result of increasing pressures from management on account of diesel emission cheating scandal.
The vacant position will be taken by current Volkswagn’s financial chief, Dieter Poetsch, who is currently also residing as member of Porsche. He will take over the position on November 1.
Mr. Winterkorn was held responsible for using computer software to manipulate actual diesel emission results. The 68-year old CEO was forced by authorities and other senior personnel to leave his position. Interestingly, he still maintained his position as the CEO of Porsche. Authorities have started a massive crackdown scrutinizing each and every employee of the company, and its past records.
Many employees are under questioning from regulators and accused of directly being involved in deceiving authorities. It is also believed that the resignation was down out of fear of getting convicted for getting involved in cheating the environmental authorities.
Effect On The Investigative Process
Few days back, it is reported that the police also raided the company’s head office in France, taking over all computer records. The automaker has shown its commitment to authorities in ensuring transparent investigation. It is probable that Mr. Winterkorn resigned to completely disassociate himself from the company. This is also likely to remove any influence which the decade long CEO could bring to the diesel scandal.
Volkswagen’s North America Chief had also announced his departure from the company. He was also offered the post of becoming the CEO of Volkswagen, after Mr. Winterkorn;s resignation. It was believed that he resigned due to a possible dispute with senior management over the future growth of the Volkswagen’s North America operations. However, it is still not clear as to the exact reason for his abrupt exit from the company. The resignation could be linked to the aftermath effects of the diesel emission scandal.
Porsche stock dipped 1.77% on Friday and closed at $4.44, following a negative trend in the past few days, and fell 7% in the last five days.
On the other hand, news of the resignation and further crackdown in the company’s headquarters led to a dip of 2.70% in the stock price for Volkswagen. Volkswagen stock has plunged 24% in the past month as a result of pessimism by investors, after the scandal came up.