Berlin: Volkswagen AG faces Germany’s biggest investor lawsuit as attorneys filed complaints totaling €8.2 billion ($9.2 billion) related to the diesel emissions scandal that wiped out a third of the company’s market value.
About 1,400 lawsuits are currently pending at a court in Braunschweig, about 20 miles (32 kms) from Volkswagen’s Wolfsburg headquarters, a judicial spokeswoman said Wednesday. Investors say they lost money on VW shares because the company was slow in disclosing the emissions-cheating issue.
Investors have lined up to sue in Germany, where VW shares plunged in the first two trading days after the 18 September disclosure of the emissions scandal by US regulators. Monday was the first business day after the anniversary of the scandal and investors had feared they needed to sue within a year of the company’s admission that it had equipped about 11 million diesel vehicles with software to cheat on pollution tests.
The amount is less than the €10.7 billion that had been expected based on lawyers’ statements last week, but more suits could still trickle in because of uncertainty about when the deadline expires. The court may need about four weeks to register all the complaints, it said.
The US government, which is investigating the company for possible criminal charges and hasn’t approved a fix for the tainted vehicles, is also among the investors suing and its case was valued at €30 million.
Volkswagen, in a statement, reiterated its view that it complied with capital-market rules and that the claims are unfounded.
Volkswagen shares rose 1.2% to €119.75 at 12:38 pm in Frankfurt trading. They’re still down 11% this year.
“The number isn’t surprising. We’ve already seen some of the cases,” said Arndt Ellinghorst, an analyst at Evercore ISI, who rates the stock as “buy.” “It will be difficult for the plaintiffs to prove that VW acted intentionally here.”
Volkswagen has set aside about €18 billion to cover the costs of the scandal, but the lawsuits won’t likely add to the tally in the near future. Porsche Automobil Holding SE has been fighting damage claims related to its aborted effort to fully takeover Volkswagen since 2011, and there’s no end in sight to those legal battles.
While the investor lawsuits pile up in Braunschweig, consumers affected by the scandal are focusing their efforts on Brussels. European Union justice commissioner Vera Jourova will meet with VW’s Francisco Javier Garcia Sanz Wednesday as part of a campaign to persuade the company to offer car owners compensation. Currently, the company is only offering repairs to European customers whereas Americans got packages worth thousands of dollars.
A law firm separately sued Porsche Holding and VW in a court in Stuttgart on behalf of 263 investors seeking a combined €547 million. Porsche Holding, which is controlled by the Porsche-Piech family, owns a majority of Volkswagen’s voting stock and is effectively its parent company.
In a interim ruling in some previous cases filed in Porsche’s hometown, the court has said it will review whether to set aside secrecy rules that the two companies were invoking as part of their defence, Andreas Tilp, an attorney for the plaintiffs, said in an e-mailed statement .
Porsche holding spokesman Albrecht Bamler said he will comment on the case later Wednesday. Bloomberg