Audi searched by German police in Dieselgate swoop

INGOLSTADT, Germany (Reuters) - German prosecutors searched Audi's two biggest plants and other sites on Wednesday in connection with the emissions scandal still rocking parent Volkswagen VOWG_p.DE, adding to pressure on the luxury division and its Chief Executive Rupert Stadler.

Volkswagen admitted in September 2015 that up to 11 million of its vehicles worldwide had software installed that cheats emissions tests, unleashing its biggest ever crisis.

The raids, the first at Audi since VW’s diesel scandal broke 18 months ago, centered on who was involved in the use of any illicit software used in 80,000 VW, Audi and Porsche cars with bigger 3.0 liter engines that were found to exceed U.S. emissions limits.

Volkswagen has already agreed to pay more than $1 billion to fix or buy back the 80,000 cars as part of an overall U.S. settlement expected to cost the group as much as $17.5 billion.

“With these search orders we aim to clarify in particular who was involved in deploying the technology concerned and in the provision of false information to third parties,” the Munich prosecutor’s office said in a statement on Wednesday, without naming any suspects.

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It said the raids involved prosecutors from several jurisdictions and state police from Bavaria, Baden-Wuerttemberg and Lower Saxony.

The police swoop coincided with a major annual press conference at which Stadler was presenting Audi’s 2016 earnings - compounding the group’s embarrassment.

“I have all along supported efforts to clear up the diesel issue at Audi,” he told reporters, while conceding that efforts to recover from the scandal were “far from over”.

A statement from the prosecutor on Wednesday’s raids cited suspicion that the cars, sold in the United States between 2009 and 2015, were also fitted with devices to cheat tests.

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VW’s Wolfsburg headquarters were searched, along with Audi’s Ingolstadt and Neckarsulm factories and six other unspecified sites, the group said. The two Audi plants employ a combined 60,000 workers.

Some 70 law enforcement officials also searched offices and private apartments as part of the Ingolstadt operation, a person familiar with the matter told Reuters, adding that Stadler’s home was not among those raided.

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Stadler, who has run Audi since 2007, has been criticized for his handling of the emissions scandal but said on Wednesday he continues to command the VW board’s full support, reiterated publicly last month.

Ingolstadt-based Audi said it had every interest in getting to the bottom of the emissions-cheating scandal and was fully cooperating with the searches.

“We will keep at it until this work is done,” CEO Stadler aid.

Cars sold in European markets are outside the scope of the investigation, the Munich prosecutor said.

Audi last year increased its diesel scandal-related provisions to 1.63 billion euros and said on Wednesday it did not expect to have to do so again. The carmaker also recorded costs of 162 million euro for the recall of cars fitted with Takata Corp 7312.T airbags.

The group reported a 37 percent drop in operating profit to 3.1 billion euros for 2016, reducing its return on sales to 5.1 percent from 8.3 percent a year earlier.

Additional reporting by Jens Hack in Munich; Writing by Maria Sheahan; Editing by David Evans and Laurence Frost