• September 29, 2016
    Last updated 1 minute ago

automotives

Blackrock joins mass investor lawsuit against Volkswagen

Court spokesman unable to provide details about the amount claimed by plaintiffs

AFP
18:09 September 16, 2016

Frankfurt: Investment manager Blackrock, the world’s largest, on Friday joined around 160 other shareholders to claim compensation from German carmaker Volkswagen over its massive diesel emissions scandal.

A spokesman for the state court in Brunswick, not far from VW’s Wolfsburg headquarters, confirmed that the lawsuit had been filed early on Friday afternoon.

The spokesman was unable to provide details about the amount claimed by plaintiffs, but weekly news magazine Der Spiegel reported that the investors were seeking more than €2 billion (Dh8.2 billion, $2.2 billion) in damages.

Blackrock targeted “Volkswagen’s failure to disclose to investors the use of ‘defeat devices’ that manipulated emission tests” in a statement on Thursday announcing the legal action.

VW admitted in September 2015 that it had built software into 11 million diesel vehicles that detected when they were undergoing regulatory emissions tests and temporarily lowered the amount of harmful nitrogen oxides in the exhaust.

As well as suffering a heavy blow to its reputation, Volkswagen has had to set aside billions for potential damages and fines, with the bill for the crisis mounting to almost $15 billion in the US alone.

Growing stack of legal challenges

Its share price has also been hammered on markets, plunging 40 per cent in the days after the revelations on September 18.

“Volkswagen continues to believe that we comprehensively fulfilled our obligations under capital markets law and that the claims are unjustified,” a spokesman for the carmaker said on Friday in response to the complaint.

The latest lawsuit adds to a growing stack of legal challenges related to the ‘dieselgate’ scandal weighing down VW, including another case at the Brunswick state court launched by almost 400 investors claiming around €4 billion.

On Friday, the German state of Hesse announced that it would launch a compensation claim of its own, becoming the second of the country’s 16 regions after Bavaria to do so.

German news agency DPA reported that the southwestern state of Baden-Wuerttemberg will soon file a separate case to avoid falling foul of a one-year legal deadline.