Investors file a $3.6 billion lawsuit against Volkswagen, in Germany
Volkswagen's troubled times show no signs of abating. A group of 278 of Volkswagen's institutional investors, have filed a $3.6 (Rs 24249crore) billion lawsuit against the company. These investors consist of companies situated across the globe, including Germany. The shareholders say that the company did not comply with its duty of informing them about the diesel emissions debacle.
Andreas Tilp, managing partner of TISAB and TILP, the firms that have been appointed to handle the suit said,"Due to the fact that, according to our information and experience ,Volkswagen AG persistently denies any settlement negotiations and also refuses to waive the statute of limitation defense until now, it was necessary to file this first multi-billion Euro lawsuit."
He has also mentioned that about 20 additional investors, have approached him with damage claims of over $1.1 billion. The TILP law firm had filed the first shareholder claim against Volkswagen on October 1, 2015.
Earlier this month, Volkswagen executives had stated that they did not expect the Dieselgate to take such a serious turn. It had then admitted that its former chairman, Martin Winterkorn, received two memos regarding the Diesel scandal in 2014. The first memo was handed to him on May 23 that advised Winterkorn about the study from the International Council of Clean Transportation. This council was the one that found out that VW was cheating. VW claims that the mail was lost in the heap of weekend mails and there's no evidence to show, that Winterkorn actually read it. .
He received a second memo on November 14, that highlighted several defects in cars, including diesel engines. It was estimated, that it would cost $22 million to fix the problem. The issue was again brought to his notice during a meeting on July 27, 2015, for which he sought further clarification. Things got out of hand in August 2015, when the development engineers had to explain the diesel emission issue to the legal department of the company.
The VW group management did not expect the diesel scandal to have a negative impact on its stock price. Share values dipped, following the scandal and other brands under its umbrella have also taken a beating. Volkswagen felt that it would not have to pay a huge sum to the US authorities, as fine. It estimated a $100 million fine, on the basis of past infringements, pertaining to the same laws, by other manufacturers. For a company the size of Volkswagen, the amount was not worrying. However, with suits and fines running into billions, it's stuck in troubled waters.
Volkswagen is still assessing the exact cost of the entire scandal. It's law firm, Jones Day, is planning on releasing a report that will explain the whole issue. For now, it's busy going through 102 terabytes (or 50 million books) of data. The report is expected to be out by the latter half of April, 2016.