VW sued by investors
VW should have informed investors too late about diesel affair
VW now has to answer also to its investors. These have filed a lawsuit, because they have lost money due to the too late information about the risks of the emissions scandal by the group. On Monday, the process begins in Braunschweig as part of a sample process.
Both sides are confident, just before the start. “We are not afraid of the arguments” says Andreas Tilp, lawyer of the plaintiff Deka Investment. The process will go to the Federal Supreme Court in any case, “no matter who wins or loses.” On the other hand, VW lawyer Markus Pfüller emphasized that the process was exclusively about fulfilling the disclosure obligations to shareholders. “We are convinced that this is the case” says Pfüller.
Claims in billions
During the hearing on Monday morning at the Higher Regional Court of Braunschweig is being negotiated whether VW has informed their investors about the affair of fraud with millions manipulated diesel engines on time. The shareholders claim for billions in damages due to losses incurred. After the scandal went public at the end of September 2015, VW’s share price collapsed. In some cases, the securities lost almost half of their value, so that investors lose high losses.
Overall, the lawsuit is a claim of around nine billion euros. In the sample process they negotiate about a value in dispute of around four billion euro. According to Tilp, Deka Investment alone is demanding 200 million euros. Another 1670 lawsuits are processed according to the outcome of the process. The lawsuit is conducted on the basis of capital markets disputes.
Further course clarified on Monday
VW lawyer Pfüller estimates that they will first discuss the further course of the proceedings on Monday. Initially, the substantive focus of the court must be clarified. This will determine which witnesses may be heard on which issues. Currently, a total of 13 days are set for trial until the end of the year. The defendants are Volkswagen and the VW main shareholder Porsche SE.
Question of the confidants will be clarified
Probably the most important question of the process is who knew when of the exhaust scandal. Tilp estimates that not only the former manager Martin Winterkorn and the board level were in the picture, but also the managers of the lower level.
At the end of February Volkswagen submitted a statement of defense in which the carmaker claimed that from the group’s point of view there were no concrete indications of price relevance in the context of the scandal. Only after the US Environmental Protection Agency published its allegations on September 18, 2015, VW was aware of the extent of the affair. The law states that news that can affect goodwill must be made public immediately.
However, according to Tilp, Volkswagen knew already in June 2008 that they could not comply with the stringent US nitrogen oxide emissions regulations. Because of that, VW betrayed their investors – since they did not know anything about it, they bought the shares too expensive.