Volkswagen to file criminal complaint over labor rep' expenses

Volkswagen AG said today it will file a criminal complaint over the alleged abuse of expense accounts to favor employee representatives, deepening a scandal that has ousted several of its top executives.

"This should create legal clarity on whether members of the workers' council were favored in connection with the billing of expenses," VW said in a statement after receiving reports from auditors.

The German carmaker did not say who the complaint would be directed against and prosecutors said they had not yet received it.

Prosecutors are already investigating bribery allegations against two former executives at the Wolfsburg-based firm, just as it struggles to shore up its earnings amid slack demand in Europe and fallout from a weaker dollar.

The scandal includes allegations that lavish holidays for labor representatives at VW's expense were incorrectly billed.

VW has fired two managers over the scandal, which also prompted the head of the workers' council, Klaus Volkert, to resign.

Personnel chief Peter Hartz _ whose name has been closely associated with Chancellor Gerhard Schroeder's efforts to reform the economy _ has also offered to step down, though prosecutors have said he is not under investigation.

The company said Monday it was filing its complaint under a law which threatens a fine or up to one year in jail against anyone convicted of trying to interfere with employees' representation through pressure or incentives.

VW said the report from auditors KPMG made clear that "several persons and companies" were under examination in the affair, but that a final report would probably come only in October.

VW shares gained 2 percent to €43.05 (US$51.94) on the Frankfurt Exchange, AP reports.