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Volkswagen AG will need to perform significant engine repairs on 540,000 cars in Germany, highlighting the complicated task the company faces as its top executives met after disclosing further emissions irregularities last week.

The recall is still planned to start by early next year, the Federal Motor Transport Authority said Monday. Fitch Ratings downgraded the carmaker’s credit rating to BBB+ from A, saying the cut reflects “corporate governance, management and internal control issues.”

Volkswagen’s board convened Monday to discuss cutbacks and the emissions investigation, which gained new urgency last week after internal whistleblowers uncovered irregularities broader than the carmaker had originally disclosed. Employees disclosed inconsistent carbon dioxide ratings for about 800,000 cars during an internal investigation, the carmaker said Sunday. Volkswagen made them public shortly thereafter, on Nov. 3. “How this happened is subject to internal investigations,” the company said in a statement, which are “ongoing.”

The admission that cheating may have been broader than the 11 million diesel vehicles previously disclosed has plunged Volkswagen deeper into the worst crisis in its history. The scandal escalated from software used to cheat on emissions tests to discrepancies on carbon-dioxide output, including in some non-diesel cars. Volkswagen has said the latest findings will add about 2 billion euros ($2.15 billion) in financial risk to the 6.7 billion euros it already set aside to cover the first hit from the probe.

Board Meeting

Cutbacks needed to stem the financial fallout of the cleanup will be discussed at the Monday morning board meeting at Volkswagen’s headquarters in Wolfsburg, Germany. Also on the table is an update on the now many-pronged investigation.

The shares fell 0.5 percent to 96.72 euros at 4:32 p.m. in Frankfurt.

An engineer at the company told management last month that CO2 emissions values had been manipulated since 2013 to fulfill targets that were unattainable by legal means, the Bild am Sonntag newspaper reported Sunday. Technicians failed to report the practice earlier for fear of retribution, the newspaper said. Volkswagen declined to comment on details of the report.

Chief Executive Officer Matthias Mueller, who was appointed in the wake of the scandal, is seeking to change VW’s corporate culture and encourage more openness in an effort to repair the company’s battered reputation. The falsified reports began shortly after former CEO Martin Winterkorn ordered a 30 percent reduction in the CO2 output of new vehicles by 2015, Bild am Sonntag said. The whistle-blower is still employed, the newspaper said.

Mueller, who has yet to visit regulators in the U.S. where the initial diesel-emissions cheating was uncovered, is under pressure to show that VW is turning a new leaf. The company’s supervisory board, which will meet Monday, has said after the latest irregularities that it will soon discuss "further measures and consequences."

— With assistance by Brian Parkin