German investors seek $9.1 billion from VWVolkswagen AG faces Germany’s biggest investor lawsuit as attorneys filed complaints totaling 8.2 billion euros ($9.1 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 about 20 miles from Volkswagen’s Wolfsburg headquarters, a judicial spokeswoman said. Investors say they lost money on VW shares because the company was slow to disclose the emissions-cheating issue.
Investors have lined up to sue in Germany, where VW shares plunged in the first two trading days after the Sept. 18 disclosure of the emissions scandal by U.S. 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 euros 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 U.S. 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 euros.
Volkswagen, in a statement, reiterated its view that it complied with capital-market rules and that the claims are unfounded.
Volkswagen shares rose less than 1 percent to 119.10 euros at the close of trading in Frankfurt. They’re down 11 percent this year.
“The number isn’t surprising. We’ve already seen some of the cases,” said Arndt Ellinghorst, an analyst at Evercore ISI. “It will be difficult for the plaintiffs to prove that VW acted intentionally here.”
Volkswagen has set aside about 18 billion euros 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 damages claims related to its aborted effort to fully takeover Volkswagen since 2011, and there’s no end in sight to those legal battles.
The Braunschweig cases will probably take years, but over the next several months Volkswagen will get a chance to respond to the complaints. The judges will decide whether to delay the litigation pending the result of a “model case” under a procedure that centralizes the evidence phase in large-scale shareholder litigation.
The model-case proceedings are currently pending at the Braunschweig Appeals Court.
While the investor lawsuits pile up in Braunschweig, consumers affected by the scandal are focusing their efforts on Brussels.
Currently, the company is only offering repairs to European customers whereas Americans got packages worth thousands of dollars.
European Union Justice Commissioner Vera Jourova met with VW’s Francisco Javier Garcia Sanz Wednesday, and said the company pledged to carry out an EU-wide action plan to address the most urgent issue of informing EU consumers and repairing the affected cars.
In July, Jourova said she would work with consumer groups and regulators to pressure the company to give payouts.
The imposition of fines and extra compensation aren’t part of the European Commission’s role, but rather the responsibility of national courts and enforcement authorities, an EU official said after the meeting in Brussels.
A law firm separately sued Porsche Holding and VW in a court in Stuttgart on behalf of 263 investors over the diesel-disclosure issue.
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 of the cases filed earlier 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 defense, Andreas Tilp, an attorney for the plaintiffs, said in an emailed statement.
Porsche Holding spokesman Albrecht Bamler said the court’s interim ruling didn’t contradict any of the company’s arguments.
Porsche, which has said the claims are unfounded, will submit its arguments to the tribunal in the respective proceedings, he said. Bloomberg