European stakeholders in Volkswagen will consider asking for damage in court from the automaker that acknowledged it had purposely modified US diesel-powered cars to pass emissions tests – the scandal has made the company lose around $25 billion in terms of market value.
Investors and car owners – who invested in the company or bought the models after VW falsely claimed it had “clean” diesel cars are now looking at legal options against the once-venerable automaker that is battling the biggest crisis in its 78-year history. The rigging of diesel-powered cars is also casting a fresh shadow layer over the entire auto industry. “If we can with some certainty establish that we, as investors, were misled by the company, and that has affected our returns, then I cannot rule out that we would seek compensation from the company,” commented under condition of anonymity a main investor from Europe. VW has used special software in about 11 million vehicles in an effort to cheat tests looking to lower the level of noxious car pollution associated with respiratory diseases and global pollution.
The company is now facing punitive damage and even a criminal investigation in the US as well as numerous investigations all around the world, with its chief executive officer Martin Winterkorn resigning on Wednesday and losing around one third of its market cap in a matter of days. “We have clients who will inevitably be taking a very close look at the possibility of a shareholder claim,” comments Clive Zietman, leader of commercial litigation at UK’s Stewarts Law, a well known firm involved in such instances. The top five preference shareholders have incurred losses of about 1.7 billion euros during the conundrum, while the main ordinary shareholders – Porsche, the state of Lower Saxony and the Qatar Investment Authority sovereign wealth fund have seen a loss of about 11 billion euros so far.