VW compliance head exits in falling-out over emissions scandal role

By Jan Schwartz and Ilona Wissenbach

BERLIN/STUTTGART (Reuters) - Volkswagen's (VOWG_p.DE) efforts to draw a line under its diesel emissions scandal were dealt a blow on Thursday after the German carmaker fell out with the compliance chief it hired to help, prompting her departure from the firm.

Christine Hohmann-Dennhardt, 65, was leaving Volkswagen's board "due to differences in their understanding of responsibilities and future operating structures within the function she leads," the carmaker said.

VW added that the former judge, poached just over a year ago from rival Daimler (DAIGn.DE) and one of the few women on a top German company board, was leaving by mutual consent, without being more specific.

The carmaker hired Hohmann-Dennhardt, an outsider with a reputation for toughness and the first woman to join its board, for the new post of board member for integrity and legal affairs at the height of the diesel scandal in October 2015 amid promises to change its top-down, engineering-driven culture.

"Volkswagen will continue to press forward with changes to its way of thinking and working," it said on Thursday.

German business daily Handelsblatt first reported that Hohmann-Dennhardt was to leave.

Two sources close to Volkswagen said it was not Hohmann-Dennhardt but procurement chief Francisco Javier Garcia Sanz and VW lawyer Manfred Doess who had led the negotiations with the U.S. Department of Justice that led to a $4.3 billion settlement earlier this month.

Reuters was not immediately able to reach Hohmann-Dennhardt for comment.

VW agreed to pay the largest ever U.S. criminal fine levied on an automaker to settle charges it conspired for nearly 10 years to cheat on diesel emission tests.

VW named insider Hiltrud Werner, head of group auditing, to take over Hohmann-Dennhardt's post.

(Additional reporting by Maria Sheahan; Editing by Harro ten Wolde/Mark Potter/Alexander Smith)