In an extensive statement released this week regarding the emissions scandal, Volkswagen said “shareholder lawsuit to be without merit.”
Europe’s biggest automaker is facing lawsuits on different fronts after it admitted in September last year that it cheated on the emissions test. After that disclosure, Volkswagen’s shares took a plunge, news which evidently did not please its investors at all. Now, the company has to cope with a lawsuit filed by shareholders – at a court in Braunschweig, Germany, who are accusing VW of a violation of disclosure obligations under capital markets law. They claim that if VW had come upfront two weeks earlier than it did, it would have stopped on some extent the big drop in shares prices. In a statement this week, the German maker said it “considers shareholder lawsuit to be without merit.” “Stock price relevance occurred only as of 18 September 2015 when the violation of US environmental regulations was announced,” VW explained. “Until then, there were no indications whatsoever of information with relevance for the stock price.”
In the same statement, the company claims the diesel warnings from 2014 did not get the CEO’s attention at that time. The German Bild am Sonntag weekly reported last week that the ex-chief Martin Winterkorn knew about the company’s admission in front of the US regulators two weeks before the scandal came to public attention. The California Air Resources Board received indications of irregularities from a study published by the International Council on Clean Transportation (ICCT) in May 2014.
On 23 May 2014, a memo about the ICCT study was prepared for Winterkorn. “This memo was included in his extensive weekend mail. Whether and to which extent Winterkorn took notice of this memo at that time is not documented,” VW said. “On 14 November 2014, Winterkorn received another memo that reported, amongst other things, on several then current product defect cases and referred to a cost framework of approx. EUR 20 million for the diesel issue in North America.” The former-CEO also attended a July 2015 meeting at which diesel emissions issues were discussed, but it is not clear whether he knew of the cheating at the time.