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article imageTop VW shareholder faces investor fury in own 'dieselgate' suit

By AFP     Sep 12, 2018 in Business

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.

The case that opened September 12  before a court in the southern city of Stuttgart and pitting angr...
The case that opened September 12 before a court in the southern city of Stuttgart and pitting angry investors against Porsche SE is much smaller than the mass lawsuit against the VW group that began in Brunswick two days earlier

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.

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