FRANKFURT -- Peter Hartz, Volkswagen's former personnel chief and the architect of German labor market reforms, is being investigated for possible misappropriation of company funds, prosecutors said on Friday.
The public attorney's office in the northern German city of Brunswick said Hartz was being investigated following his testimony which indicated he had approved the inappropriate use of company expenses.
"Today, prosecutors searched the offices of Dr. Hartz at Volkswagen on a court order and secured evidence," Klaus Ziehe, spokesman for the city prosecutor said in a statement.
Hartz could not be reached for comment. He has denied allegations that he bought the consent of senior labor leaders as "absurd".
Volkswagen confirmed in a statement that Hartz's offices were searched and pledged to continue to support the investigation.
The company reaffirmed Chief Executive Bernd Pischetsrieder's desire to clear the matter up "without regard to person or position".
Volkswagen initiated the investigation by filing a complaint with the prosecutor's office in June accusing two employees of fraud and betrayal of confidence.
The company also hired KPMG to carry out an independent, external audit on its books, which the accounting firm is expected to deliver in November.
Hartz resigned in July, shortly after the prosecutor began the investigation.