VW fined $4.3bn, in­vestors de­mand more trans­parency

The Star Late Edition - - INTERNATIONAL - Edward Tay­lor at

VOLK­SWA­GEN in­vestors de­manded greater trans­parency and re­forms at the car­maker af­ter it ad­mit­ted to crim­i­nal of­fences in rig­ging US emis­sions tests and US pros­e­cu­tors in­dicted six cur­rent and for­mer man­agers over the scan­dal.

The Ger­man com­pany agreed to pay $4.3 bil­lion (R58bn) in civil and crim­i­nal fines in a set­tle­ment with the US Jus­tice Depart­ment this week, the largest US penalty levied on a car­maker.

VW ad­mit­ted about 40 em­ploy­ees at its VW and Audi brands deleted thou­sands of doc­u­ments in an ef­fort to hide from US au­thor­i­ties the sys­tem­atic use of so­called de­feat de­vices to rig diesel emis­sions tests, a scale of wrong­do­ing that led some in­vestors to call for deep re­forms.

“What is most dis­turb­ing… is the pat­tern of de­cep­tion, both in de­vel­op­ing and per­fect­ing the de­feat de­vices, as well as de­lib­er­ately ob­struct­ing the sub­se­quent in­ves­ti­ga­tion,” said An­nie Ber­sagel, an ad­viser for re­spon­si­ble in­vest­ments at Nor­we­gian Mu­tual In­sur­ance firm Kom­mu­nal Land­spen­sjon­skasse (KLP). KLP and KLP mu­tual funds have in­vest­ments in VW eq­ui­ties and fixed in­come prod­ucts.

“Go­ing for­ward we would like to see more truly in­de­pen­dent di­rec­tors. This may change gov­er­nance at the com­pany where we see some is­sues… We would like to see a claw­back pro­vi­sion re­lat­ing to vi­o­la­tions.”

So far, the scan­dal has cost VW up to $22bn in the US alone, in deals with own­ers, reg­u­la­tors, US states and deal­ers. De­spite the fines, VW has con­tin­ued to pay bonuses to top man­agers.

For 2015 VW agreed to pay 12 cur­rent and for­mer mem­bers of the man­age­ment board a to­tal of 63.2 mil­lion (R908m) in fixed and flex­i­ble re­mu­ner­a­tion. It said board mem­bers would have 30per­cent of their vari­able bonus awards with­held, if the share price re­mained below 140.

VW shares are trad­ing 151.89.

Six cur­rent and for­mer VW man­agers have been in­dicted, in­clud­ing Heinz-Jakob Neusser, the for­mer head of devel­op­ment for the VW brand. Five of them are in Ger­many and it is un­clear if they will come to the US to face charges since Ger­many typ­i­cally does not ex­tra­dite its cit­i­zens.

US at­tor­ney gen­eral Loretta Lynch said US au­thor­i­ties would con­tinue to pur­sue those re­spon­si­ble for emis­sions cheat­ing.

VW’s chief ex­ec­u­tive Matthias Mueller said the com­pany “deeply re­grets the be­hav­iour that gave rise to the diesel cri­sis” and vowed to con­tinue changes in how the com­pany op­er­ated. – Reuters

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