Rupert Stadler, CEO of German vehicle producer Audi, briefs the media during the annual press conference in Ingolstadt, Germany.
Earlier this month, Munich prosecutors widened their probe at Audi to include Stadler and another member of Audi's top management, investigating them for suspected fraud and false advertising. The arrest has been made in connection with Audi's parent company Volkswagen's role in emissionsgate (dieselgate).
The Munich prosecutors said the move against Stadler was not made at the behest of US authorities. Prosecutors said last week they had searched Stadler's home for evidence as part of an investigation that has been underway for over a year.
"The principle of the presumption of innocence continues to apply to Stadler", he added.
It may be noted that this probably the biggest arrest in the Dieselgate scandal that shook the operations of German auto manufacturing company Volkswagen post-2015.
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Until now German prosecutors have only questioned former VW CEO Dr. Martin Winterkorn.
Audi said in a statement last week that it was "co-operating with the authorities" in the probe.
Stadler has been under fire since Audi admitted in November 2015 - two months after parent VW - that it also installed illegal "defeat device" software to cheat US emissions tests. Two are serving prison terms; Winterkorn and the others remained in Germany and are unlikely to be extradited.
Audi, who has been caught up in the emissions scandal that afflicted Volkswagen, had no immediate comment.
Shares in Volkswagen dropped by 2 per cent in Frankfurt. He was charged with wire fraud and conspiracy to defraud American customers and violate the Clean Air Act.