HAMBURG — German prosecutors have widened their investigation at Continental to include probes of former CEO Elmar Degenhart and finance chief Wolfgang Schaefer, whose surprise departure was announced Wednesday.
The focus of the investigation is suspected accessory to fraud, breach of trust and a failure to fulfil supervisory duties, the Hanover prosecutor’s office said on Thursday.
The people under investigation also include a former board member of Continental’s Powertrain unit, it said, without naming the person.
Prosecutors seized documents at Continental on Thursday, the day after the supplier said it would replace Schaefer as its chief financial officer.
Continental’s premises in Hanover and Regensburg, both in Germany, were searched last year as part of a probe into Volkswagen Group’s emissions cheating devices.
Prosecutors are investigating the supplier’s role in supplying engine components for a 1.6-liter VW diesel engine that breached emissions limits and masked excessive pollution using illegal software. The engine-control software for the main 2.0-liter engine at the heart of the VW scandal — which was also used in the U.S. — came from Continental’s rival Robert Bosch.
Asked whether there was a connection between the search at Continental and its move to dismiss Schaefer, a prosecutor said: “I assume so.”
Continental said on Wednesday that CEO Nikolai Setzer would take over Schaefer’s responsibilities.
“These changes have been taken in the context of the already known investigations by the public prosecutor’s office in Hanover, regarding the illegal use of defeat devices in diesel engines and shortcomings in the ongoing investigation by Continental,” the supplier said in a statement on Wednesday.
“Continental is investigating the case rigorously and thoroughly and is cooperating unconditionally with the public prosecutor’s office,” it added.
Schaefer’s dismissal could be a sign prosecutors are preparing a bigger fine than he braced management for before his departure.
“While the investigations are well-known, the termination of the CFO’s appointment creates uncertainty and will most likely weigh on the share price,” Jefferies analyst Sascha Gommel said in a report.
Schaefer was appointed Continental’s CFO in 2010. In 2019, his appointment was extended until 2024.