VW investors demand €9.2bn
• German car maker in court over dieselgate scandal
Investors have taken Volkswagen to court to seek €9.2bn in compensation for the hit to the car maker’s share price from its dieselemissions scandal, although the judge said some claims could be time-barred.
Investors took Volkswagen (VW) to court on Monday to seek €9.2bn in compensation for the hit to the car maker’s share price from its dieselemissions scandal, though the judge said some claims could be time-barred.
Shareholders representing 1,670 claims are seeking compensation over the scandal, which broke in September 2015 and has cost VW €27.4bn in penalties and fines so far.
It was likely that only some of the claims would be taken into account due to the statute of limitations, presiding judge Christian Jaede told the Braunschweig higher regional court as proceedings got under way.
The plaintiffs say VW failed in its duty to inform investors about the financial impact of the scandal, which became public only after the US Environmental Protection Agency (EPA) issued a “notice of violation” on September 18 2015.
Had investors known about VW’s criminal activities in rigging emissions tests, they may have sold shares earlier or not made purchases, thereby avoiding losses, the plaintiffs argue.
VW shares lost up to 37% of their value in the days after authorities exposed illegal levels of pollution emitted from VW diesel cars.
“VW should have told the market that they cheated and generated risk worth billions,” said Andreas Tilp, a lawyer for the plaintiffs. “We believe that VW should have told the market no later than June 2008 that they could not make the technology they needed in the US.”
VW’s decision between 2005 and 2007 to install cheating software in diesel cars was illegal, but it was not clear it was taken to keep investors in the dark, Jaede said.
Tilp said VW should have made it public that it could not meet US emissions standards by legal means, adding if the court did not see it this way it would limit the plaintiffs’ case. VW has admitted systematic emissions cheating, but denies wrongdoing in regulatory disclosure.
“This case is mainly about whether VW complied with its disclosure obligations to shareholders and the capital markets,” VW lawyer Markus Pfueller told the court.
VW says the EPA’s issuance of the notice of violation was not in keeping with how US authorities had handled similar cases. Because other car makers had reached a settlement for emissions cheating without an EPA notice of violation, and because VW was in talks about reaching a settlement, VW’s board did not see the need to brief investors before September 2015, VW said in court papers.
VOLKSWAGEN SHOULD HAVE TOLD THE MARKET IT CHEATED AND GENERATED RISK WORTH BILLIONS