Deutshe Telekom managers allegedly tried extending its sponsorship of VW-owned Bundesliga football club VfL Wolfsburg in exchange for hundreds of millions in extra commissions from the carmaker, daily Süddeutsche Zeitung reported.
Such an agreement between the two companies would be illegal, according to the paper.
Two former managers and a former consultant for Deutsche Telekom subsidiary T-Systems, along with VW purchasing department employees are under investigation.
The offices of current and former managers and employees at both companies have already been searched in four cities, prosecutors confirmed, refusing to reveal more details.
But sources told Süddeutsche Zeitung that offices at VfL Wolfsburg were also searched.
A manager at the Bonn-based Deutsche Telekom reportedly instigated the investigation after he discovered “irregularities” at T-Systems, which provides a number of telephone and internet services to large businesses such as VW.
A T-Systems employee was forced to leave the company in autumn of 2010 due to internal suspicions. The company subsequently notified prosecutors, the paper reported.
The telecommunications company strictly divides customer acquisition and sponsoring activities to avoid conflicts of interest.
Meanwhile VW said it would “completely” support the investigation.
Though no employees at VfL Wolfsburg have been targeted by investigators, the probe comes at an inconvenient time. The team is fighting to keep its place in the first division and recently fired its coach.