German prosecutors on Monday opened an investigation of former Volkswagen AG Chief Executive Martin Winterkorn and Herbert Diess, head of the Volkswagen passenger vehicle brand, for allegedly not informing investors quickly enough about potential losses in connection with the emissions-cheating scandal.
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Europe’s largest automaker was holding its first annual shareholders meeting since admitting in September to cheating USA diesel emissions tests in a scandal that risks costing the company tens of billions of dollars.
“This misconduct goes against everything that Volkswagen stands for”, he added nine months after the start of the “Dieselgate” affair, when it emerged VW had installed emissions-cheating software into 11 million diesel engines worldwide. However, they said that the second suspect was not Hans Dieter Potsch, who was Volkswagen’s chief financial officer when the scandal came to light and is now chairman of the supervisory board.
Porsche SE, the holding company that controls a majority of voting rights, has said it will back the proposal. Prosecutors in Germany have accused Winterkorn, and another former board member, of withholding information from investors about VW’s emissions scandal.
Law firm Quinn Emanuel Urquhart & Sullivan L.L.P. has filed one of two lawsuits in Germany against Volkswagen A.G.
The adviser wants reform of the supervisory board, which is supposed to monitor the main management board. The agency concluded after its inquiry that all of the members of the Volkswagen supervisory board should be held responsible for failure to inform shareholders, according to a Reuters report, which was confirmed by a person with firsthand knowledge of the decision but who was not authorized to speak publicly.
The Financial Times reports Winterkorn had already received a memo in May 2014 about certain discrepancies in the emissions test results, but VW has not clearly established whether Winterkorn had read, or understood the significance of, the note at the time. Since the admission, shares of the stock are off more than 20 percent.
The California State Teachers’ Retirement System claimed on Tuesday that VW misled investors about emissions, seeking damages that could reach as high as 700 million euros ($790 million) if other investors agree to join the action. That gives outsiders limited opportunity to influence the company, even in the wake of scandal.
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Volkswagen has allocated some $18 billion for the cheating scandal, with the money to be spent on the cost of vehicle refits plus a still undetermined amount as settlement with United States authorities fro violating anti-pollution laws.
