International Development News
Development News Edition

UPDATE 1-VW investors seek $11 bln damages over dieselgate scandal


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.

"We believe that VW should have told the market no later than June 2008 that they could not make the technology that they needed in the United States."

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.

Had investors known about VW's criminal activities, they may have sold shares earlier or not made purchases, thereby avoiding losses on their shareholdings, the plaintiffs argue.

VW shares lost up to 37 percent of their value in the days after authorities exposed illegal levels of pollution emitted from VW diesel cars.

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.

So board members at the time, including current chief executive Herbert Diess and Chairman Hans Dieter Poetsch, did not violate disclosure rules, VW said in its defence document filed with the court.

However, plaintiffs, including fund management firm Deka, allege managers below management board level, including divisional heads, knew about deliberate and systematic emissions cheating.

The company was therefore aware of criminal activity and so investors should have been warned earlier, the plaintiffs say.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION/BLOG/INTERVIEW

How music can help expectant mothers during pregnancy

Music provides pleasant ambience for all but its more important for expectant mothers as besides ensuring pleasant environment for them it also directly and indirectly influences the unborn babies. There are various scientific findings to c...

EdTech: A technical approach to flexible and cost-effective education

Its hight time for the world to go for innovative approaches like e-learning over traditional learning methods that need physical infrastructure, long-term planning, and huge investment. ...

Our school campaigns are our strongest ally: Joaquin Antuna, founder of Peace and Cooperation

Joaquin Antuna is the founder of Peace and Cooperation, a Spanish NGO which was nominated as peace messenger by the United Nations in 1986. Antuna is of very firm opinion that in order to have an incisive impact on the community we live in,...

'No escape from telephones', this 1953 prediction actually comes true

In 1953, a telephone company chief predicted that therell be no escape from telephones in the future....

Videos

Latest News

US STOCKS-Wall Street dips as investors await U.S.-China trade progress

U.S. stock indexes moved slightly lower on Thursday as investors moved to the sidelines with mixed messages and no concrete signs of progress on U.S.-China relations. The U.S. House of Representatives passed two bills to back protesters in ...

UPDATE 3-Supporters of Bolivia's Morales march with coffins of dead protesters

Supporters of ousted Bolivian leader Evo Morales marched into the capital La Paz on Thursday carrying coffins of people killed in clashes with the military and police, drawing attention to the human cost of the crisis gripping the South Ame...

Tennis-Spain's Bautista Agut out of Davis Cup after father's death

Spains Roberto Bautista Agut has withdrawn from the Davis Cup Finals after the death of his father on Thursday. Bautista Agut played in Spains victories over Russia and Croatia but left the team and returned to Castellon after the health of...

UPDATE 1-Maltese man detained in journalist murder probe released on bail

Yorgen Fenech, a prominent businessman arrested on Wednesday in connection with investigations into the murder of Maltese journalist Daphne Caruana Galizia, was released on bail on Thursday evening, police sources said.He will be under roun...

Give Feedback