Dieselgate: Court Orders Top Volkswagen Shareholder Porsche SE to Pay Damages
Holding company Porsche SE, separate from sports car-building VW subsidiary Porsche AG, is mainly owned by descendants of VW Beetle inventor Ferdinand Porsche.
File photo of the Volkswagen logo. (Image: Reuters)
German judges ordered Volkswagen's largest shareholder, holding company Porsche SE, to pay damages to some of its own investors over its handling of VW's "dieselgate" emissions scandal. A Stuttgart court awarded shareholders in two cases a total of 47 million euros (USD 54 million), saying that Porsche SE failed to inform investors in a timely way about software to cheat emissions tests built into millions of Volkswagen cars.
The 2015 revelation sent the value of the manufacturer's stock plunging more than 40 percent and Porsche SE's 30 percent in the following days. In a 130-page judgement, the court said a note sent to Volkswagen chief executive Martin Winterkorn in May 2014 - more than a year before "dieselgate" became public - should have prompted the companies to inform markets of the financial risks linked to the cheating software.
Holding company Porsche SE, separate from sports car-building VW subsidiary Porsche AG, is mainly owned by descendants of VW Beetle inventor Ferdinand Porsche. It holds a controlling stake in VW. In a statement of its own, the firm said it plans to appeal both judgements, arguing that "the suits are unjustified and the claims have no basis."
Wednesday's two rulings are the first in a swarm of investor actions against Porsche SE and Volkswagen in Stuttgart and Brunswick, with claims totalling over nine billion euros. Meanwhile prosecutors are investigating VW on suspicion of fraud, stock market manipulation and false advertising.
And the German government has opened the way for VW customers to launch collective proceedings against the firm, with one consumer association planning an action for early November. Judges said the company could appeal the Wednesday ruling.
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