Prosecutors investigate VW, DaimlerChrysler

17th August 2005, Comments 0 comments

17 August 2005, BRAUNSCHWEIG, GERMANY - German public prosecutors have widened their investigation into the bribery and sex scandal that has hit Europe's biggest carmaker, Volkswagen AG.

17 August 2005

BRAUNSCHWEIG, GERMANY - German public prosecutors have widened their investigation into the bribery and sex scandal that has hit Europe's biggest carmaker, Volkswagen AG.

A spokesman for the public prosecutor's office in Braunschweig, which is near the VW headquarters in northern Germany, confirmed Tuesday that the investigators were expanding their deliberations.

"Each day the picture becomes more complete," he said, but he declined to set out details or provide more information about those who might be included in the widened investigation.

The VW bribery scandal centres on claims of kickbacks paid by potential suppliers and allegations that the company paid for so- called pleasure trips for union representatives to keep them on side. This included flying around high-class prostitutes.

In the meantime, Germany's business daily Handelsblatt reported Wednesday that the nation's federal agency for the supervision of financial services (BaFin) had also moved to widen its investigation into possible share price manipulation and insider trading at another auto maker, DaimlerChrysler AG.

Based in Stuttgart, DaimlerChrysler is the world's fifth biggest carmaker.

A BaFin spokeswoman told Handelsblatt the investigation had been launched before the big surge in DaimlerChrysler's shares following the surprise resignation in July of the company's chief, Juergen Schrempp.

A routine investigation had raised the possibility that offences had been committed that were contrary to Germany's capital market laws.

However, the BaFin declined to provide any details while DaimlerChrysler also declined to comment.

DPA

Subject: German news

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