Investors sue Volkswagen in Germany for more than €3b

Volkswagen is being sued by investors for more than €3 billion (S$4.5 billion) in damages over the carbon emissions scandal.
Volkswagen is being sued by investors for more than €3 billion (S$4.5 billion) in damages over the carbon emissions scandal.PHOTO: REUTERS

BERLIN (AFP) - A group of 278 institutional investors from Germany and abroad is suing embattled auto giant Volkswagen for more than 3 billion (S$4.5 billion) in damages over the emissions-cheating scandal, their lawyers and the court said Tuesday (March 15).

The lawyers, TISAB Rechtsanwaltsgesellschaft mbH, said in a statement that they had filed "the first multi-billion-euro lawsuit in Germany against Volkswagen" at a court in Brunswick, northern Germany.

They accuse the carmaker of repeatedly violating capital market disclosure rules between June 6, 2008, and Sept 18, 2015.

"The 278 plaintiffs are exclusively institutional investors from Germany and all over the world, including Australia, Austria, Britain, Canada, Denmark, France, Italy, Japan, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, the United States and Taiwan," the statement said.

Among them were 17 German investment funds and one of the biggest US pension funds, CalPERS.

A spokesman for the Brunswick court confirmed that a combined suit for 3.255 billion worth of damages had been lodged.

VW declined to comment.

The suit was filed in Brunswick because VW is based in the nearby town of Wolfsburg.

VW, which until recently entertained ambitions of becoming the world's biggest carmaker, has been plunged into its deepest-ever crisis by revelations last September that it installed emissions-cheating software into 11 million diesel engines worldwide.

On top of still unquantifiable regulatory fines in a range of countries, VW is facing a slew of legal suits, notably in the US and Germany, from angry car owners, as well as from shareholders seeking damages for the massive loss in the value of their shares since September.

The shareholders say the carmaker knew about the irregularities long before the scandal broke and should have informed shareholders much earlier because they must have known it would affect the share price.

But VW has repeatedly reiterated its firm belief that its management board fulfilled its disclosure obligation under German capital markets law.

It argues that none of its top bosses could have known of the full extent of the scandal until it broke in September 2015.

On the Frankfurt stock exchange on Tuesday, VW shares were showing a loss of 1.9 per cent in a slightly softer market.