Will Volkswagen pip Enron as world's worst corporate scam?

While this expensive fine could be more than covered by the 21 billion euros (USD 24 billion) the company now holds in cash, the scandal has raised fears of major job cuts.

The company's manipulative devices were fitted in diesel engines that are lesser than 5 percent passenger vehicles in the United States, but account for over 50 percent market in Europe.

This, otherwise admirable, market share was a result of car makers lobbying hard for the governments to promote the adoption of diesel engines as a way to reduce carbon emissions.

A niche player in the US, the company did a lot to promote its image as a green company. Infact, until the scandal broke, it was running ads that showcased Volkswagen rally driver Tanner Foust and Top Gear USA host driving elderly women in a TDI Volkswagen.

Given that the company touted its "clean diesel" technology, no US jury is likely to be lenient with it, considering that the technology on board served to hide the fact that particulate emissions were up to 40 times greater.

While the ads that were meant to dispel myths regarding diesel as a fuel- that it was dirty and created a lot of noise- have been removed from the automaker’s official YouTube channel, the people's car is finding itself at the wrath of environment authorities, users, activists and government alike.

FT says even "if it does turn out that other European and Asian car manufacturers, who have invested heavily in diesel technology, did not commit such brazen fraud, the scandal will probably re-establish the perception of diesel engines as dirty after two decades of concerted effort to change that view."

While the silver lining in this situation could be the boost to develop other cleaner fuel alternatives, Europe will, atleast for the short-term, have to face a major chill wind.

But the Volkswagen scandal is worse than Enron's financial fraud as it impacts the health of millions. FT states," The high levels of nitrogen oxides and fine particulates that the cars’ on-board software hid from regulators are hazardous and detrimental to health, particularly of children and those suffering from respiratory disease."

Once any scandal breaks, it is almost immediately reflected in its stock price. The stock collapse in the past few days may merely be the tip of the iceberg that's shook the foundation of very many offices in Europe.

FT argues that while Enron was a young company, the renowned 78-year old Volkswagen may face a potential irreparable reputational damage apart from a crisis of confidence and massive legal liabilities.

The scandal, Profesor Elson University of Delware believes , "was an accident waiting to happen," highlights the autocratic manner in which the company was run, red-flagging massive governance issues. The company, it is said, was governed through an odd combination of family control, labour influence and government ownership.

While the long-term survival is a real question, Elson says he wouldn't be surprised if the German government will have to bail Volkswagen out.