Rupert Stadler, the CEO of Volkswagen's luxury arm Audi, was arrested on Monday over the German carmaker's emissions test cheating scandal, Munich prosecutors said.
"As part of an investigation into diesel affairs and Audi engines, the Munich prosecutor's office executed an arrest warrant against Mr. Professor Rupert Stadler on June 18, 2018," the Munich prosecutor's office said in a statement.
A judge in Germany has ordered that Stadler be remanded in custody, it said, to prevent him from obstructing or hindering the diesel investigation.
The move follows a search last week of Stadler's private residence, ordered by the prosecutors investigating the manager on suspicion of fraud and indirect improprieties with documents.
Audi and VW confirmed the arrest and reiterated there was still a presumption of innocence for Stadler.
Stadler himself was not immediately available for comment.
VW admitted in September 2015 to using illegal software to cheat US emissions tests on diesel engines, sparking the biggest crisis in the company's history and leading to a regulatory crackdown across the auto industry.
Monday's arrest comes as VW's new group CEO Herbert Diess is trying to introduce a new leadership structure, which includes Stadler, and speed up the group's shift towards electric vehicles in the wake of its emissions scandal.
A spokesman for Porsche SE, the company that controls VW and Audi, said Stadler's arrest would be discussed at a supervisory board meeting on Monday.
A total of 20 people are under suspicion in the Audi probe, which focuses on cars sold in Europe that were believed to be equipped with software which turned emissions controls off during regular driving.
Volkswagen has pleaded guilty to criminal charges in the United States and nine managers, including former CEO Martin Winterkorn, were charged there.
Two are serving prison terms; Winterkorn and the others remained in Germany and are unlikely to be extradited because Germany does not extradite its nationals to countries outside the European Union.
Audi said in a statement last week that it was "cooperating with the authorities" in the probe.
The scandal has so far cost the VW group more than 25 billion euros ($29 billion) in buybacks, fines and compensation.
Volkswagen shares were down 2.6 percent at 157.60 euros in Frankfurt trading.
