ZCZC
BCN-30
GERMANY-AUTOMOBILE-TRIAL-VOLKSWAGEN
Top VW shareholder faces investor fury in own ‘dieselgate’ suit
FRANKFURT AM MAIN, Sept 13, 2018 (BSS/AFP) – A German court on Wednesday
began hearing a lawsuit pitting Porsche SE, the majority shareholder in
Volkswagen, against angry investors who say they were told too late about the
diesel emissions cheating scandal.
The case in the southern city of Stuttgart is much smaller than the mass
lawsuit by investors against the VW group that began in Brunswick on Monday.
But in both courts shareholders are seeking compensation for the losses
they suffered after VW’s share price plunged by 40 percent when the cheating
was revealed in September 2015.
A Stuttgart court spokesman said judges would announce on October 24
whether they would proceed or adjourn hearings until a verdict was reached in
the bigger VW trial, as it seeks to answer many of the same questions.
Plaintiffs in both proceedings argue that they should have been warned
sooner about the risks the carmaker faced as US regulators began to question
why VW diesels were more polluting on the road than in lab tests.
The auto giant eventually admitted to having installed so-called “defeat
devices” in 11 million cars worldwide to dupe emissions tests.
VW insists that the cheating was carried out by a small group of engineers
without superiors’ knowledge.
And although executives are legally obliged to share promptly any
information that could affect the share price, VW says the information it had
at the time was not significant enough to warrant warning capital markets.
– Repeat red flags –
But plaintiffs counter that red flags were raised several times before
September 2015.
Some 3,600 shareholders are suing VW for damages totalling around nine
billion euros ($10.5 billion) at the Brunswick court.
In the Stuttgart case some 500 investors are asking for a billion euros,
according to a law firm representing plaintiffs in both proceedings.
The holding company Porsche SE, separate from car maker Porsche AG, is
mainly owned by descendants of VW Beetle inventor Ferdinand Porsche. It holds
a 52.2-percent stake in VW.
Three years after the dieselgate scandal, VW remains mired in legal woes
at home and abroad. It has so far paid out more than 27 billion euros in
fines, vehicle buybacks, recalls and legal costs.
Also on Wednesday, a consumer protection group announced that it was
teaming up with Germany’s largest auto club ADAC for a US-style class action
lawsuit against VW, representing duped customers.
The suit is the first of its kind in Germany and comes after the
government approved a change in legislation earlier this year to help VW
drivers seek compensation.
Justice Minister Katarina Barley said at the time about two million diesel
owners could benefit from the new law.
BSS/AFP/HR/1025