Daimler Fined $960 Million to Settle Rigged Diesel-Car Probe
Company accused of selling 684,000 tainted vehicles.
(Bloomberg) -- German prosecutors fined Daimler AG 870 million euros ($960 million) for “negligent violation of supervisory duties” to settle a probe into selling rigged diesel cars.
Prosecutors found the maker of Mercedes-Benz cars sold about 684,000 vehicles that didn’t completely comply with regulations on emissions of nitrogen oxides, according to statements from Stuttgart authorities and Daimler. The company agreed not to contest the verdict and confirmed its financial guidance.
The fine is the latest fallout from heightened scrutiny in the aftermath of Volkswagen AG’s diesel-cheating scandal, which continues to reverberate across the German auto industry four years later. Volkswagen’s Chief Executive Officer Herbert Diess and Chairman Hans Dieter Poetsch on Tuesday were charged with market manipulation in Germany over allegations they failed to inform investors early enough about the rigged engines.
Authorities in Stuttgart, Daimler’s hometown, opened proceedings earlier this year. Volkswagen’s Porsche unit in May settled for 535 million euros, and parts supplier Robert Bosch GmbH agreed to pay 90 million euros.
Daimler, which has projected a “significant” decline in 2019 operating earnings, said the fine isn’t expected to result in a “relevant” drag on third-quarter earnings. In a profit warning in July, the company set aside about 1.6 billion euros to deal with diesel-related court proceedings. The provision came weeks after Ola Kallenius took over as chief executive officer.
Daimler shares declined 0.7% to 45.94 euros at 3:26 p.m. in Frankfurt.
To contact the reporters on this story: Chris Reiter in Berlin at creiter2@bloomberg.net;Oliver Sachgau in Munich at osachgau@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Iain Rogers
©2019 Bloomberg L.P.