Porsche se must pay damages because of vw diesel scandal
The regional court of stuttgart has ordered the VW umbrella company porsche SE to pay damages of almost 47 million euros. Reason is delayed information in the course of the VW diesel scandal.
The holding company had thus violated public disclosure obligations under capital market law, said judge fabian reuschle on wednesday. The former head of VW, martin winterkorn, who at the time was also chairman of the board of porsche SE, had also breached his duties with at least gross negligence and had not taken sufficient care to clear up the diesel scandal at europe’s largest carmaker. The rulings against porsche SE are not yet legally binding.
The holding company porsche SE, controlled by the porsche and piech families, holds a good 52 percent of the voting rights in volkswagen. The holding company – as well as VW itself – had always denied the accusations. Among others, a british investment fund had filed a lawsuit. He was awarded around 3.2 million euros in damages. The ruling represents a milestone, said attorney klaus nieding. The other plaintiff is also a fund. Both plaintiffs had invested in preferred shares of porsche SE. According to the decision, the claim for damages only relates to the period from january 23 to december 23. May 2014 to 22. September 2015.
Reuschle criticized winterkorn for not setting aside sufficient reserves at volkswagen for the diesel issue and for not correcting the holding company’s management report accordingly. He had also not passed on the relevant information to the holding company. He had given free rein to the development of legal violations as of may 2014. Instead of setting up a steering committee at volkswagen to clarify the diesel issue, the manager had wanted to wait for developments and discussions with the authorities in this case. "This is no longer in keeping with the model of a diligent business leader."
In addition to stuttgart, proceedings against volkswagen and porsche SE are also pending at the higher regional court in braunschweig. This is a test case. There, investors such as the savings bank subsidiary deka, which is acting as a model plaintiff, are demanding billions in compensation for damages.
The extent to which the stuttgart court ruling will now have an impact on other proceedings is completely unclear. Porsche SE had already announced in advance that it would appeal to the federal supreme court in the event of a defeat. VW admitted in september 2015 that it had manipulated emissions tests on millions of diesel cars and was subsequently plunged into a serious crisis. In the course of this, comprehensive investigations were initiated by the public prosecutor’s office. Among others also against winterkorn.
The single judge wanted to hear, among others, winterkorn and the head of bosch, volkmar denner, as well as other high-ranking managers from the industry as witnesses in the proceedings. But this did not happen because winterkorn, as the defendant, has a comprehensive right to refuse to testify. Another witness is to be heard in proceedings pending with reuschle.
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