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09/27/2019Abgasaffäre and no endSo expensive the diesel scandal for VW can still be
Christoph Rottwilm
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Under pressure: Volkswagen boss Diess (r.) And chief overseer Pötsch may have to go to court
Volkswagen wants to tackle its dark past and start a clean future. But this week it became clear once again: the exhaust gas scandal is far from over - and it can still be expensive.
Investments worth billions, dozens of new models in the planning and many big words about the clean car world of the future: no doubt, Volkswagen stock market chart is determined to draw a line under its recent grim past and open a whole new chapter in the history of the company. A chapter under the heading Electromobility, as it was last heard at the industry show IAA in Frankfurt. "New Volkswagen" should have nothing to do with such unpleasant things as the exhaust gas scandal, in which thousands of customers and countless shareholders feel cheated to this day.
But this part of the Volkswagen history can not be ended so easily. This was once again clear this week. At 12 noon on Tuesday afternoon, the prosecution in Braunschweig sent an e-mail to a large mailing list informing them of an indictment they had lodged with the Braunschweig Regional Court. The accused in it: Herbert Diess, current CEO of Volkswagen, Hans Dieter Pötsch, Ex-Finanz- and now Chairman of the Supervisory Board of the Group, as well as the former Volkswagen boss Martin Winterkorn.
The three prosecutors accuse the public prosecutors of "purposely informing the capital market too late about billions of euros in the company's substantial payment obligations resulting from the discovery of the so-called 'diesel scandal' and thus unlawfully influencing the stock market price of the company." Or in short: Diess, Pötsch and Winterkorn are said to have been guilty of market manipulation.
In fact, on 22 September 2015, Volkswagen published a compulsory notice - a so-called ad-hoc release - on the emissions theme. However, from the point of view of investors, it was already too late: The US Environmental Protection Agency (EPA) had already made its allegations against the Group public on 18 September 2015 - triggering a massive fall in the price of Volkswagen shares.
The three defendants have already rejected the prosecutors' allegations. However, if the charges are allowed, Diess, Pötsch and Winterkorn will have to go to court. The images, which would probably go through the news for months, would not fit Volkswagens new, clean image.
In addition, these pictures would have high symbolic value. While Volkswagen publicly likes to talk about current business successes and future projects, the company still argues in the courtrooms of the country with countless customers and investors about its past mistakes - and a lot of money.
The dispute essentially revolves around two points:
400,000 customers against Volkswagen: model procedure begins
Countless customers demand damages from Volkswagen because they see the value of their vehicles decimated by the exhaust gas scandal. According to reports, the company and its subsidiaries have already been sued more than 60,000 times nationwide. Many courts have already decided for the customers, who were then replaced by a new or equivalent amount of money.
If the trend continues, further payments may be due to Volkswagen. In addition, in Braunschweig, Germany, proceedings will begin in the coming week for a model declaration suit, which has already been joined by far more than 400,000 Volkswagen customers. This procedure should clarify the requirements of the customers in principle.
However, there is one drawback: observers expect that even the model procedure itself, which is presumably driven to the BGH as a last resort, will take a long time. Finally, if it comes to a VW driver opinion positive judgment, then each of the affected diesel customers must again go to court to make his claim.
All this should take years. And because customers who continue to use their VW diesels will be deducted from the possible damages in the form of a user fee in favor of Volkswagen, some may not end up with much compensation.
Many lawyers advise therefore only those affected without legal expenses insurance to join the model suit (this is possible until Friday, September 27,). All others are better advised to go it alone in court.
Shareholders against Volkswagen: claims of 9 billion euros
Countless investors are also against the group, because they - similar to the prosecutor Braunschweig - believe that the Volkswagen management had informed the public too late about the problems with millions of diesel vehicles. These investors claim they have suffered losses that would otherwise have been avoided.
The central procedure under the capital investor model procedure law (KapMuG), in which the issue is to be fundamentally clarified for all investors, has been running in this case since autumn 2018, also in Braunschweig. This process is likely to last at least until the end of next year. The claims that investors make to Volkswagen in the KapMuG process total around EUR 9 billion.
The lawsuit against Volkswagen managers Diess and Pötsch and ex-CEO Winterkorn this week could be particularly important in view of the dispute between the Group and its shareholders. After all, it's basically about the same issue.
The Tübingen lawyer Andreas Tilp, who represents the complaining investors in Braunschweig, weighs down on request. The criminal proceedings and civil proceedings were "two completely different pairs of boots," said Tilp. "The plaintiffs we represent do not need help from the criminal courts to win against VW and Porsche Automobil Holding SE."
Analyst: VW should already have covered money
But you can also see it differently. Autoanalyst Jürgen Pieper of Bankhaus Metzler, for example, says it seems quite plausible to him that, in view of the legal action, there is a growing risk that Volkswagen actually informed the events too late. This would increase investors' chances for compensation.
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In any case, Pieper assumes that Volkswagen has already paid several billion for possible payments to shareholders. According to his calculations, the claims from the period in question in autumn 2015 add up to a maximum of three to four billion euros.
If the autoanalysts' thoughts are correct, then all those investors who still have shares in Volkswagen in the portfolio, can only hope that the corporation in case of emergency enough on the high edge. Otherwise, the next setback may threaten the share price.
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