A German court ruled on Friday that investors looking for damages concerning a sharp decrease in Volkswagen shares after the automaker revealed emissions cheating in 2015 can also look to redress from majority shareholder Porsche SE.
Investors worldwide have submitted lawsuits at a local court in Braunschweig, asking around 9 billion euros ($10.4 billion) in damages from Volkswagen, which they stated did not address shareholders soon enough over its cheating of emissions tests in the United States.
The lawsuit at the local court in Braunschweig, near Volkswagen’s Wolfsburg headquarters, is headed by investment firm Deka.
Because of the procedural matters, the suit will now be expanded to Porsche SE, the investment vehicle for the Porsche and Piech families that manages 52 percent of VW’s voting stock, a spokeswoman for the court stated.
“The third civil senate of the Higher Regional Court of Braunschweig has clarified that apart from Volkswagen, Porsche Automobil Holding SE is also a defendant in the capital investor model procedure” pending at the court, the court stated.
Lawyers for VW have stated the automaker had no obligation to reveal the possible financial damage of its emissions manipulations prior to September 22, 2015 when it specified the implications of its usage of illicit emissions-control software, as it believed the commercial costs of the cheating would be insignificant.
“This (move by the Braunschweig court) is giving investors another chance to submit any other claims,” stated Axel Wegner of law firm Tilp, which represents Deka Investment GmbH.
Deka lost money on its Volkswagen shares when they dropped sharply following the emissions cheating but states the purpose of its legal action is to give a test case – resolving generic or common issues for other similar cases. However, unlike in a U.S. class action suit, this case does not have the legal impact of resolving all individual claims.
Public hearings of the Braunschweig case are due to begin in early September.
