Volkswagen went on trial on Monday to face investors seeking 9.2 billion euros ($10.6 billion) in compensation, arguing the carmaker should have informed shareholders earlier about its diesel emissions scandal.
Shareholders representing 1,670 claims are seeking compensation for a slide in Volkswagen's (VW) share price triggered by the scandal, which broke in September 2015 and has cost the firm 27.4 billion euros in penalties and fines so far.
"VW should have told the market that they cheated and generated risk worth billions," Andreas Tilp, a lawyer for the plaintiffs, told the Braunschweig higher regional court.
The plaintiffs say VW failed in its duty to inform investors about the financial impact of the scandal, which became public only after the U.S. Environmental Protection Agency (EPA) issued a "notice of violation" on Sept. 18, 2015.
VW has admitted systematic emissions cheating, but denies wrongdoing in matters of regulatory disclosure.
"This case is mainly about whether Volkswagen complied with its disclosure obligations to shareholders and the capital markets," VW lawyer Markus Pfueller told the court. "We are convinced that this is the case."
VW says the EPA's issuance of the notice of violation was not in keeping with how U.S. authorities had handled similar cases involving other carmakers.
Because other carmakers 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, the carmaker said in a filing with the Braunschweig court.
VW had already made substantial provisions in late 2015 to cover vehicle recalls, and because previous fines by U.S. authorities for similar violations were below $200 million, there was no need to inform investors under German law, the carmaker said.