LIFE is getting increasingly uncomfortable for senior VW Group managers in Germany as prosecutors widen the scope of their investigation into who knew what and when about the company’s global diesel emissions scandal.

According to various reports, some 28 homes and offices were searched last week as the number of people accused of criminality in the case rose from 21 to 37 – including former VW Group CEO Martin Winterkorn.

Prosecutors are alleging that Mr Winterkorn knew about the diesel scam far sooner than he said. The company claims that its board of management did not know about the software cheating until late August 2015, and then confessed to US authorities in early September that year.

Subsequent evidence from US investigations, as outlined in various US federal court documents, has thrown significant doubt over that version of events.

According to the German prosecutors: “Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused (Winterkorn) may have known about the manipulating software and its effects sooner than he has said publicly”.

Mr Winterkorn, who was in charge of the VW Group for eight years until his September 2015 resignation, has consistently denied any knowledge of the emissions cheating prior to August 2015.

The recent and dramatic actions of the German prosecutors will probably help European investors suing VW for 8.8 billion euros ($A12.53 billion) in damages related to the collapse of the company’s share price when news of the scandal emerged.

So far, seven current or former VW executives have been charged in an ongoing fraud investigation being conducted by the US Department of Justice. One is awaiting sentence in Detroit while another is being held without bail in Miami.

The other five remain in Germany but the US is making noises about their extradition. One VW employee has already been jailed in South Korea and another is expected to follow him into a cell soon.

Meanwhile there have been strong indications that all is far from resolved internally at the VW Group about the company’s post scandal direction. The senior German judge hired especially to guide VW towards a more ethical path has left after only 13 months of a three-year contract.

According to VW, Christine Hohmann-Dennhardt was leaving by mutual consent “due to differences in their understanding of responsibilities and future operating structures within the function she leads”.

It is understood that Ms Hohmann-Dennhardt clashed with VW’s legal affairs head Manfred Doess, who is part of the old-boys network at VW and a close ally of the Porsche-Piech families, owners of a large chunk of the company’s stock.

The most senior VW management are keen to distance themselves from responsibility for the diesel scandal, especially the spectre of prosecution, and are understood to have thwarted Hohmann-Dennhardt’s mission to shed light on how the scandal unfolded.

For her efforts over the 13 months, Ms Hohmann-Dennhardt is set to receive a payout of up to 15 million euros ($A21.36 million) along with an 8000 euro ($A11,390) per month pension.

By Daniel Cotterill