Senior Audi engineer is arrested over diesel scandal

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Porsche Automobil Holding SE, the investment vehicle that controls a majority stake in Volkswagen, said the company's provision hike would negatively affect its third-quarter results.

Since admitting to installing emissions-cheating software in 11 million diesel cars across the world, Europe's largest carmaker has been in talks with customers and governments over compensation and damages.

Volkswagen AG will take a surprise charge of about $3 billion as plans to buy back or retrofit tainted US diesel cars proves more complex than expected, bringing total damages from the two-year-old scandal to $30 billion.

German weekly Der Spiegel reported today that VW could face further scrutiny because it failed to properly inform USA regulators about changes to emissions control software in almost one-half million cars with gas engines.

On Wednesday, German prosecutors said they had arrested a second employee of the luxury carmaker Audi, which belongs to VW, and is also involved in its emissions cheating scandal.

Traders and analysts were disheartened by the fact the company was still paying charges over two years after the scandal broke.

Separately Munich prosecutors made an arrest in connection with the scandal.

German media named the arrested suspect as Wolfgang Hatz, who stepped down from his post on Porsche's management board past year after being suspended over the Dieselgate investigation.

Hatz was Audi's head engine developer from 2001 until 2007 when he was promoted to VW Group powertrain chief.

Volkswagen may have further diesel-related costs that aren't directly related to the cheating scandal. Two days ago, one of the Volkswagen Group's most prominent research and development experts, Wolfgang Hatz, was arrested-not in America, but in Munich. One man has so far been jailed in connection with the scandal: Volkswagen engineer James Liang received a 40 month sentence in a U.S. court last month.

The additional costs will be reflected in VW's third quarter results, which will be reported next month. He declined further comment at an event in suburban Detroit to announce a new longer warranty for VW vehicles.