Germany Fines Volkswagen $1.2 Billion Over Diesel Scandal

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Automaker Volkswagen said Wednesday that it's being fined $1.5 billion by German authorities in connection with the diesel emissions scandal.

The world's biggest automaker accepts the fine and takes responsibility for its actions, it said Wednesday in a regulatory filing. Germany's government on Monday ordered Daimler to recall almost 240,000 cars fitted with illicit emissions-control devices, part of a total of 774,000 models affected in Europe as a whole.

"The Prosecutor's Office in Braunschweig ascertained a violation of supervisory duties", the prosecutor's office said in a statement, adding that the fine did not address civil claims or claims by vehicle owners. "Volkswagen assumes that such termination of the proceedings will also have significant positive effects on further active administrative proceedings in Europe against the Volkswagen AG and its subsidiaries".

VW shares closed 0.1 percent higher at 159.78 euros.

"We work with vigour on dealing with our past", VW CEO Herbert Diess said in a separate statement.

Volkswagen has said that prosecutors in the German city of Braunschweig levied the £880m fine, saying the carmaker failed to properly oversee its engine development department's activities, resulting in about 10.7m diesel vehicles with illegal emissions-controlling software being sold worldwide.

VW said it held a board meeting to discuss the crisis, with members of the supervisory board also being informed. "Further steps are necessary to gradually restore trust again in the company and the auto industry".

Finance chief Frank Witter will update investors on August 1 on the implications of the fine for the carmaker's cash position, alongside its second-quarter results, VW said.

Analysts at Evercore ISI said this fine would likely help end all criminal investigations against VW in Europe, but would not settle shareholder lawsuits.

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