The corruption scandal at Volkswagen this year robbed Europe’s largest car-maker of at least â,¬5-million (about R40-million) in illegal kickbacks and theft, an independent report by auditors KPMG disclosed recently.
The report, laying bare the scandal involving allegations of paid-for sex, false expenses, extravagant gifts, misuse of company funds to set up bogus firms, and the supply of Viagra, brought closer criminal charges against Peter Hartz, the former personnel director and close adviser to Germany’s outgoing German chancellor, Gerhard Schröder.
Hartz, architect of Schröder’s labour market reforms, stands accused of signing off invoices totalling about R5-million submitted by a ”girlfriend” (prostitute) of Klaus Volkert, the disgraced former head of VW’s group works council.
He resigned in August after taking responsibility for the scandal that has claimed the jobs of Skoda’s personnel director, Helmuth Schuster, and VW’s personnel manager, Klaus-Joachim Gebauer, over suspicions that they set up fake firms backed by misappropriated company funds for their personal gain. They have denied any wrongdoing.
Bernd Pischetsrieder, VW’s chief executive, said the KPMG report would be handed over to state prosecutors who are examining whether to bring criminal charges against those involved in the scandal.
Pischetsrieder, struggling to restore VW’s reputation and profitability, said the group would sue the men involved for restitution and would set up a global ombudsman system enabling whistle-blowers to report suspected cases of corruption anonymously.
After the report was submitted to the VW supervisory board at its Wolfsburg headquarters, he said: ”Volkswagen will be a more transparent firm both internally and externally.” He promised tighter controls over all spending, including expenses.
The KPMG investigation, still incomplete, drew on 25 500 pages out of 97 500 documents submitted, 400 000 computer files encompassing 134 gigabytes and evidence obtained in interviews with 100 people. It confirmed that company employees, working with outsiders, had comprehensively tried to defraud the company, but Klaus Liesen, head of the board’s audit committee, insisted that many of the activities had been intercepted by VW’s internal control systems.
The board recently approved plans to invest about R184-billion in its core cars business over the next three years to boost pre-tax profits by about R32-billion to R41-billion by 2008. — Â