VW owners split for first time over diesel scandal in AGM vote
FRANKFURT: Volkswagen AG’s typically close-knit owners publicly split for the first time over the diesel crisis after the German state of Lower Saxony withheld support for two executives under investigation for their role in the scandal.
Volkswagen’s second largest shareholder abstained from what is typically a ceremonial vote at the annual meeting, declining to back former CEO Martin Winterkorn and current VW brand chief Herbert Diess. Lower Saxony representatives plan to speak in greater detail about their decision yesterday.
“During the current proceedings, the state of Lower Saxony doesn’t want to give the slightest impression that it positions itself in any way,” the German state said in a statement. “That is solely the matter of prosecutors and potentially later the courts.”
Lower Saxony’s move puts it at odds with the Porsche and Piech families, who used their clout to ensure both men were supported by a majority of shareholders. The rift capped a tumultuous annual meeting where chairman Hans Dieter Poetsch, the chief financial officer when the cheating occurred, bore the brunt of investor dissatisfaction over the automaker’s handling of the scandal, which has wiped billions of euros off VW’s market value and led to the recall of millions of vehicles. On Monday, prosecutors in VW’s home state of Lower Saxony openeda probe into whether Winterkorn and Diess were too slow to disclose the potential cost of rigging diesel cars to pass emissions tests. The investigation centers around a VW meeting about damage and product issues last July that the two executives attended and where the diesel issue was discussed on the sidelines. Winterkorn asked for further clarification, according to VW. The carmaker didn’t notify investors until after US authorities went public in September.
The market-manipulation probe German prosecutors will potentially by aid shareholders in their suits against the automaker. The California State Teachers’ Retirement System claimed on Tuesday that VW misled investors about emissions, seeking damages that could reach as high as 700 million euros (US$793mil) if others agree to join the action. Another 278 institutional investors sued in March, seeking 3.3 billion euros in a lawsuit over the timing of the market disclosures. Volkswagen - which has so far set aside 16.2 billion euros to cover costs for the scandal, including repairs, legal costs and fines -said the investigation announced this week doesn’t involve new facts or revelations. — Bloomberg