By Max Bernhard 
 

Volkswagen AG (VOW.XE) on Friday was hit with a record diesel-emissions fine in Australia, and in a second blow regulators there started penalty proceedings against one of the car maker's financing units.

Australia's Federal Court ordered Volkswagen to pay 125 million Australian dollars ($86 million) in penalties, the court's highest issued fine to date, the Australian Competition and Consumer Commission, or ACCC, said Friday.

Volkswagen breached consumer law by misrepresenting its compliance with Australian diesel-emissions standards, the competition watchdog said.

Volkswagen said in a statement that it will decide in the coming weeks whether to appeal the court's decision.

Volkswagen admitted in 2015 to having rigged some 11 million of its diesel vehicles world-wide with software that allowed them to dodge government emissions tests. To date the German company has had to pay billions of dollars in fines and other costs related to what it calls the "diesel issue."

"Essentially, Volkswagen's software made its diesel cars, utes and vans operate in two modes. One that was designed to test well and another that operated when the vehicle was actually being used and which produced higher emissions," ACCC Chairman Rod Sims said.

In Australia, more than 57,000 vehicles sold between 2011 and 2015 were affected, the ACCC said.

Volkswagen said in its statement that "most of these have subsequently had an update to the engine control software under the ongoing voluntary recall" and that "the relevant authorities have confirmed that this update satisfies European and Australian emission standards."

Volkswagen also admitted to having made false representations when it applied for the vehicles to be published on the Australian government's "Green Vehicle Guide" website, the commission added.

In a second blow, the Australian Securities and Investments Commission said separately Friday that it has started penalty proceedings against one of the company's financing units. Volkswagen Financial Services Australia Pty Ltd. didn't make appropriate checks before giving out 49,380 loan contracts, the corporate watchdog alleged.

Credit providers are required to make inquiries about a borrower's financial situation before handing out loans under Australia's National Credit Act.

 

Write to Max Bernhard at max.bernhard@dowjones.com

 

(END) Dow Jones Newswires

December 20, 2019 02:37 ET (07:37 GMT)

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