The fallout from Volkswagen’s emissions scandal continued early Thursday (September 24), with Chief Executive Martin Winterkorn announcing his resignation over the affair.
Other developments include:
- Institutional investors react
- German shareholder association’s comments
- Nordea bans further investments in VW
- Vigeo downgrades ESG rating
- Further US lawsuits
- VW seeks criminal investigation
Addressing reports after a meeting of the firm’s supervisory board in Wolfsburg yesterday evening, VW Chairman Berthold Huber said the board was in agreement that VW needed a “fresh start” after the scandal. “To this end, Mr Winterkorn offered his immediate resignation, which we accepted with thanks and great respect,” said Berthold, adding that his successor would be decided at a board meeting on Friday.
Huber also said Winterkorn had no knowledge that VW had deliberately manipulated the emissions of its diesel cars during tests in the US. He further stated that the company was conducting a full investigation, the result of which would be immediate dismissal of those responsible. “Members of the board have also asked the public prosecutor for the city of Braunschweig to conduct a criminal investigation. VW will fully support this investigation,” Huber added.
VW investors welcomed the news of Winterkorn’s resignation. “Mr Winterkorn simply had no more credibility on financial markets. His successor must now do his utmost to recover the lost trust of customers, employees, investors and regulators,” said Frankfurt-based asset management firm Union Investment.Prior to reducing its exposure to the automaker earlier this week, Union owned 0.4% of VW.
The Financial Times reported that Nordea Asset Management had banned its fund managers from making investments in Volkswagen.
In the US, meanwhile, there are reports of at least 20 lawsuits seeking damages from the German automaker in the wake of the scandal. One from the law firm Bernstein Litowitz Berger & Grossmann, alleges that owners of VW diesel cars should be owed at least $7,000, as this was the price difference versus petrol models.
In Germany, there have been no further reports of lawsuits from shareholders seeking compensation for the steep fall in VW’s share price due to the scandal. Responsible Investor reported on Tuesday that a lawyer in Tübingen was preparing to sue the company on behalf of at least ten investors, among them asset managers and pension funds.
Speaking to Der Spiegel this morning, Ulrich Hocker, President of German shareholder association DSW, also advised shareholders to wait until all the facts of the scandal come out before considering a lawsuit. “The statute of limitations on this is one year, so shareholders have plenty of time,” Hocker said.
Elsewhere in Europe, the scandal has prompted French sustainability research firm Vigeo to severely downgrade VW’s score on ESG issues. Out of a total ESG score of 100, VW now ranks just 18. “Our opinion is based on VW’s ability to mitigate its reputational risks, to safeguard the cohesion of its human capital or to ensure the efficiency of its internal processes,” Vigeo said. The leader in the sector, according to Vigeo, is French automaker Peugeot Citroen, with a score of 60.