As it continues to address the fallout from the Volkswagen diesel scandal, automotive supplier Continental is asking its shareholders to approve a settlement with former executive board members and the group's directors and officers (D&O) liability insurers. According to the annual general meeting invitation published on Tuesday, the agreement will only become effective with shareholder backing, triggering a 43.7 million euro payout from insurers. Continental stated that this represents the best possible outcome. "With shareholder approval, Continental can largely close the chapter on the diesel issue and focus entirely on its future as a pure-play tire manufacturer."

The diesel scandal has cost Continental a total of nearly 300 million euros. This figure includes a fine from the Hanover public prosecutor's office and the costs of the internal investigation into the scandal. The spun-off powertrain division Vitesco, which now belongs to the Herzogenaurach-based supplier Schaeffler, paid 125 million euros of this total to Continental. In return, Schaeffler will now receive half of the settlement amount paid by the insurers.

Continental had filed claims against the D&O insurers of former CEOs Karl-Thomas Neumann, Manfred Wennemer, and Elmar Degenhart, as well as three other former board members. Under D&O ("Directors & Officers") policies, companies pay the premiums to protect themselves against costly management errors.

For Continental, the settlement marks another milestone in resolving the diesel scandal. Damage claims against a former legal advisor remain outstanding. Continental was involved in the development of the engines and associated software at the heart of the Volkswagen diesel scandal. In 2015, Europe's largest automaker admitted to installing illegal software in diesel engines. This software ensured that vehicles met emission limits under test conditions, while emitting significantly higher levels of toxic nitrogen oxides on the road. To date, the diesel scandal has cost Volkswagen more than 30 billion euros, primarily for fines and damages in the United States.

(Reporting by Christina Amann and Alexander Hübner. Edited by Olaf Brenner. For inquiries, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and economics) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)