Prosecutors investigate VW works council boss in pay inquiry

HAMBURG (Reuters) - German prosecutors said on Tuesday they were investigating the chairman of Volkswagen's powerful works council as part of a inquiry into whether some of its members were paid excessively, turning him from a witness into a suspect.

Bernd Osterloh is being investigated over an allegation that he "contributed to the conclusion of the remuneration agreement that is suspected of being unlawful", a spokesman for the public prosecutor's office in Braunschweig said.

Osterloh has not yet been questioned and has requested, via his lawyer, access to relevant files and will respond to any allegations, a spokesman for the Volkswagen works council said, adding that its chairman was "beyond reproach".

Prosecutors have been investigating four people since 2016 on suspicion of preferential treatment of works council members and, on the basis of those investigations, prosecutors decided to investigate Osterloh, who had previously been a witness.

Volkswagen said in November 2017 it had obeyed the law in its payment of Osterloh, a day after prosecutors and tax authorities raided the offices of several senior officials at the carmaker in an inquiry into whether he had been overpaid.

A newspaper reported in May that prosecutors were investigating the chief executive of Volkswagen's Porsche business, Oliver Blume, over a possible breach of fiduciary trust linked to payments made to a Porsche works council member.

(Reporting by Jan Schwartz; Writing by Michelle Martin; Editing by Alexander Smith)