Volkswagen AG is reportedly preparing to appoint Bram Schot as interim chief of Audi AG following the arrest of CEO Rupert Stadler as prosecutors probe the carmaker over the "dieselgate" emissions rigging scandal.

Volkswagen, Audi's parent company, may announce the appointment as early as June 18, Bloomberg News reported, citing a source familiar with the matter.

Shares in Audi fell 1.5% and Volkswagen slid 3% by 12:13 p.m. in Frankfurt after Stadler was taken into custody. The move represented the highest profile arrest in the ongoing investigation into the scandal that began when VW admitted in 2015 to fitting millions of diesel cars with software designed to fool pollution tests.

"We confirm that Mr. Stadler was taken into custody this morning at the request of the public prosecutor's office," Volkswagen said in a statement. "The principle of the presumption of innocence continues to apply to Mr. Stadler. The Supervisory Board of Volkswagen AG will address this matter at today's meeting in Wolfsburg."

Last week, German prosecutors named Stadler as a suspect in the diesel case, along with another unnamed board member.

Meanwhile, Schot, the head of sales and marketing at Audi who joined Volkswagen in 2011, has been untainted by the emissions crisis, Bloomberg News noted.

Schot, who has held posts at the commercial-vehicles unit, joined Audi's management board in 2017.