September 28, 2017 / 12:35 PM / 2 years ago

Munich prosecutors arrest ex-Porsche executive in Audi emissions probe: source

MUNICH (Reuters) - Munich prosecutors have arrested a former board member of Volkswagen (VOWG_p.DE) unit Porsche in connection with an emissions scandal at carmaker Audi, a person familiar with the matter said on Thursday.

Audi cars are parked in front of the company's headquarters in Ingolstadt, Germany, March 15, 2017. REUTERS/Lukas Barth

Wolfgang Hatz, former Research and Development chief at Porsche and head of powertrain development at Audi and parent Volkswagen in previous roles, was taken into custody, the person said, marking the first arrest of a former board member of one of Volkswagen’s units in Germany.

A lawyer representing Hatz declined to confirm the arrest and also declined any further comment.

Hatz left Porsche last year, having been suspended since Volkswagen’s emissions test-cheating scandal broke in September 2015. Investigations found no evidence against him, Porsche said in May 2016.

Munich prosecutors earlier said they had arrested a second suspect and widened the number of suspects in their investigation. They did not disclose the suspect’s identity.

Prosecutors have also searched personal premises, a spokeswoman for the Munich prosecutors said, adding that corporate locations were not part of the raid.

Audi has no knowledge of the arrest and continues to cooperate with authorities, a spokesman said.

German business daily Handelsblatt first reported the arrest and Sueddeutsche Zeitung disclosed Hatz’s identity.

Audi admitted in November 2015, two months after parent Volkswagen’s diesel emissions scandal broke, that its 3.0 liter V6 diesel engines were fitted with an auxiliary control device deemed illegal in the United States.

In March, Munich prosecutors searched offices at the carmaker’s Ingolstadt base, where about 44,000 workers are employed, and the premises of Jones Day, a U.S. law firm hired by Volkswagen to lead an investigation into the emissions scandal.

Four months later the U.S. Justice Department said it had charged a former Audi manager with directing employees at the company to design software to cheat U.S. emissions tests in thousands of Audi diesel cars.

The former Audi manager, Italian citizen Giovanni Pamio, was subsequently arrested by Munich prosecutors on suspicion of fraud and false advertising in connection with the carmaker’s emissions scandal. Pamio remains in custody pending ongoing German investigations and an extradition request by U.S. authorities.

Pamio’s lawyers said he is cooperating fully with prosecutors and has denied the allegations.

Writing by Andreas Cremer and Christoph Steitz; Editing by Sabine Wollrab

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