Wednesday, July 27, 2005

Audit Committee of the Supervisory Board brought up to date on investigations

Text from Volkswagen AG.
Wolfsburg, 25 July 2005 - Following indications of irregularities in the conduct of business, the Volkswagen Group dismissed two employees and notified the Braunschweig Public Prosecutor’s Office in June 2005. At the same time, the Group commissioned its Internal Auditing Department and the auditors KPMG with the comprehensive and exhaustive clarification of events in the company. KPMG and the Internal Controlling Department today presented the organization of the investigation and current findings to the Audit Committee of the Supervisory Board during a special meeting in Wolfsburg.

At the meeting, the auditors explained that the analysis currently concerns several individuals and companies. Each of these companies in turn has different shareholders.

In addition to the complex international company and shareholder structure, the experts also have to examine large quantities of documents and data carriers, including 30 packing cases of records from the Czech Republic alone as well as numerous hard disks. Extensive enquiries in Germany and abroad are required to evaluate the information available. Given this complex situation with regard to data, the auditors were not yet in a position to present tenable interim results on Monday.

The same applies to open questions concerning expense reports which are also part of the investigation.

In this context, the Audit Committee agreed with the proposal by Dr. Bernd Pischetsrieder and the Chairman of the Group and General Works Councils, Bernd Osterloh, to file charges under § 119 of the German Industrial Constitution Law. This step is being taken to obtain legal clarification of whether members of the Works Council were given preferential treatment in connection with expense reports.

Dr. Pischetsrieder: “The objective of our application is to obtain clarification from an independent source whether, and if so, which individuals have violated the relevant legal provisions.” Bernd Osterloh confirmed the wish for joint action: “It is important for our further cooperation in the Group to clarify this matter as quickly and conclusively as possible.”

All members of the Audit Committee praised the speedy investigative work undertaken so far by the Volkswagen Internal Controlling Department and KPMG. It was agreed that KPMG would submit an interim report to the next regular meeting of the Supervisory Board of Volkswagen AG in September 2005. In view of the volume of data still to be analysed, KPMG does not expect to issue a final report before the end of October.

Today’s meeting of the Audit Committee of the Supervisory Board of Volkswagen AG was attended by Dr. Klaus Liesen (Chairman), Prof. Dr. Ferdinand Piëch and Bernd Osterloh. Following the resignation of Dr. Klaus Volkert, the Supervisory Board must elect the fourth member at its next meeting in September. Dr. Bernd Pischetsrieder attended the meeting as a guest.

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