Daimler Faces Diesel-Engine Fraud Investigation in Germany-2nd Update

By William Boston 

BERLIN--German prosecutors have launched an investigation into allegations that an undisclosed number of Daimler AG employees may have committed fraud linked to sales of the company's diesel-powered cars, a spokesman for the Stuttgart state's attorney said Thursday.

A spokesman for the prosecutor declined to provide any details about the specific allegations against the Daimler employees. He would only say that the individuals are suspected of committing fraud in connection with the sale of diesel vehicles with false emissions documentation. No one has been charged with any wrongdoing.

The maker of Mercedes-Benz cars dismissed the allegation that it manipulated diesel engines to cheat on emissions tests. A company spokesman cited a German government investigation that determined last year that found no evidence of manipulation of the company's diesel engines.

"Our engines have been certified according to current laws, and the [Federal Motor Transport Agency] and the German ministry of transport confirmed this," said Daimler spokesman Jörg Howe, echoing the auto maker's previous denials of wrongdoing.

The probe of Daimler employees comes on the heels of the admission by rival Volkswagen AG that it did manipulate nearly 11 million diesel engines world-wide to cheat on emissions tests. Volkswagen pleaded guilty to committing fraud in the U.S., agreeing to pay nearly $25 billion in fines, penalties and compensation to consumers.

Six current and former Volkswagen employees have been indicted on conspiracy charges in the U.S. One has pleaded guilty and another is in federal detention pending trial.

In the Daimler investigation, it is unclear whether prosecutors suspect any manipulation of diesel engines on the scale of that proven at Volkswagen.

The Daimler spokesman said the company learned of the investigation from media reports. The company has since received confirmation from the prosecutor, but has otherwise received no details about the investigation while management doesn't' know which employees are involved, he said.

Mr. Howe pointed to the German government-led investigation, carried out by the Transport Ministry and the Federal Motor Vehicle Agency last year, that determined that engines in Daimler vehicles showed no signs of manipulation.

Write to William Boston at [e-mail]

(END) Dow Jones Newswires

March 23, 2017 08:39 ET (12:39 GMT)

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