Angry Investors Want Volkswagen to Cough Up $3.7 Billion
Private investors are suing Volkswagen for $3.7 billion over its emissions cheat.
Washington is threatening to fine Volkswagen up to $46 billion for installing software into its diesel cars that allowed them to beat American emissions tests. Now, private investors want in on the action.
Washington is threatening to fine Volkswagen up to $46 billion for installing software into its diesel cars that allowed them to beat American emissions tests. Now, private investors want in on the action.
On Monday, attorneys filed a lawsuit on behalf of 278 global institutional investors in the company, asking for $3.7 billion. They allege the German automaker took too long to disclose information, which cost them huge amounts of money as the value of the company’s shares plummeted in the wake of the cheat. Last month, it reported that sales had fallen 13.2 percent from a year ago. Sales of the Passat, made in the United States, were down more than 30 percent.
The lawsuit was filed Monday in Braunschweig, Germany, not far from VW’s headquarters in Wolfsburg. It comes nearly six months after Volkswagen admitted the cheat, which affects about 600,000 cars in the U.S. and nearly 11 million more around the world. It also gives new insight into the residual damage the emissions scandal has created. After it broke, the 10 biggest non-German shareholders in Volkswagen saw $4 billion in value wiped away. Qatar’s sovereign wealth fund also suffered $8.4 billion in losses due to the cheat.
The lawyer representing the plaintiffs, Andreas Tilp, told Bloomberg the suit was necessary because the iconic German company refused to participate in settlement talks with investors
As Volkswagen stonewalls investors, it is negotiating with the U.S. government. Its lawyer, Robert Giuffra, told U.S. District Judge Charles Breyer last month that negotiations are “progressing,” and the company has admitted to the cheat.
Among the plaintiffs in the new VW case are investors from Australia, Austria, Canada, Denmark, France, Italy, Japan, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, Britain, the United States, and Taiwan. It includes 17 German investment management companies, the California Public Employees’ Retirement System — the largest U.S. pension fund — and insurance companies.
A representative for Volkswagen told Bloomberg that the company could not comment on the new suit because it had not yet seen it. It did not respond to an email from Foreign Policy requesting comment on it.
Photo credit: Carsten Koall/Getty Images
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