Volkswagen CEO Herbert Diess, together with chairman Hans Diester Poetsch, have been charged with market manipulation by a German court, according to a bill of indictment filed on Tueday.
In a nutshell, the courts ruled that the pair misled investors when they failed to inform them about the company’s 2015 diesel emissions scandal early enough.
In addition, former VW CEO Martin Winterkorn has also been charged in the indictment. He had left the company just days after the scandal made headline news.
Back in 2015, VW admitted to using illegal software resulting in lower emissions when testing their vehicles. VW said it was confident the allegations would prove groundless, BBC reports.
Mr Diess will continue to be CEO, the company's lawyers told Reuters on Tuesday.
"The company has meticulously investigated this matter with the help of internal and external legal experts for almost four years. The result is clear: the allegations are groundless," VW said in a statement to Bloomberg.
Lawyers for both Mr Winterkorn and Mr Poetsch have said the two men are blameless, while Mr Diess's lawyer said the current CEO did not join Volkswagen until July 2015 and would have had no idea about the breadth of the scandal.
In September 2015, the company had admitted to selling almost 600,000 cars in the US that were fitted with “defeat devices” designed to limit emissions being emitted from the vehicles. Reportedly, millions more across the globe were also fitted with the device between 2009 and 2015.
This is the second indictment by prosecutors in relation to the scandal, with Mr Winterkorn and three other VW managers being charged with fraud last April.