VW rejects accusations over pay of top official

Volkswagen and its unions rebuffed accusations yesterday that its top labour representative has been overpaid, seeking to calm the waves a day after prosecutors and tax investigators raided the offices of senior officials of the motor-manufacturing giant.

The latest troubles add to a string of legal battles more than two years into the VW diesel emissions scandal and only weeks after European Union and German antitrust officials had swooped on the company and rival car makers over suspicions of collusion.

VW and the works council said separately that payments to VW labour leader Bernd Osterloh were in line with legal guidelines.

Osterloh’s office was raided on Tuesday, along with those of VW’s finance chief and personnel boss.

VW and the council said they were confident that Osterloh’s remuneration would be found to be compliant with the law.

Osterloh and fellow members of VW’s supervisory board are due to meet tomorrow to ratify management’s spending plans for the company over the next five years.

The raid by prosecutors and tax officers was related to suspected overpayment and related tax evasion, a source said, referring to the potential for overpayment to result in higher operating expenses and the payment of too little tax.

But a tax professor at Berlin’s Free University said under Germany’s corporate tax law, firms were entitled to declare only 50% of the remuneration of supervisory board members for tax purposes.

“It remains to be seen whether suspected tax fraud inspired this action,” the professor said.

An analyst said: “If wrongdoing is found, most of the heat is expected to fall on those involved.” – Reuters

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