Audi Agrees to Pay EUR800 Million Fine for 'Dieselgate' Scandal

Audi AG's 'Dieselgate' scandal has officially come to an end. Following the issuance of an administrative order against the German carmaker by Munich's public prosecutor yesterday, October 16, for illegally manipulating the diesel test emissions of some of its V6 and V8 diesel vehicles, followed by the imposition of a EUR800 million (nearly PHP50 billion) fine, the regulatory proceedings against Audi AG is officially terminated, forcing Audi AG to "significantly undercut major financial key performance indicators forecasted for the fiscal year 2018." The Munich public prosecutor's office breaks down the EUR800 million fine to EUR5 million (around PHP311 million) for the maximum penalty as legally provided for negligent regulatory offenses and EUR795 million (over PHP49 billion) for the "disgorgement of economic benefits" or to effectively negate the profits received by Audi AG following its illegal practice. Based on the investigation by the Munich public prosecutor's office, Audi AG knowingly breached the emissions tests as the vehicles were being monitored for their "regulatory conformity" and that these breaches meant that certain V6 and V8 diesel models developed by the company did not meet regulatory requirements. In addition, Audi AG "failed to discover" that some diesel engines produced by Volkswagen AG and made available in the Unites States and Canada (EA 288 series) and worldwide (EA 189 series) from 2004 have an "impermissible software function" that continue to have an effect until 2018. In a statement following the issuance of the administrative order against Audi AG, the company said that it accepts the fine and will not lodge an appeal against it, and that by doing so, "Audi AG admits its responsibility for the deviations from regulatory requirements."