Volkswagen sued by US government over alleged Dieselgate fraud
Securities and Exchange Commission claims the firm and its former chief executive misled investors; Volkswagen denies charges
The United States Securities and Exchange Commission (SEC) has sued Volkswagen and its former chief executive Martin Winterkorn, claiming it defrauded investors in relation to its handling of the Dieselgate scandal. The firm has said it will “vigorously” contest the charges.
According to the SEC, the charges relate to more than $13 billion (£9.8 billion) in bonds Volkswagen issued between April 2014 and May 2015. That was the time period between the publication of the initial study that found higher than claimed emission levels from VW Group diesel-engined cars and the firm’s admission it had installed ‘defeat devices’.
The SEC complaint alleges that Volkswagen made false and misleading statements to investors about its financial standing, vehicle quality and environmental compliance. It says that “by concealing the emissions scheme, Volkswagen reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company”.
Volkswagen issued a statement, saying that: “The SEC’s complaint is legally and factually flawed, and Volkswagen will contest it vigorously.”
The firm added that the securities were “sold only to sophisticated investors who were not harmed and received all payments of interest and principal in full and on time.
“The SEC does not charge that any person involved in the bond issuance knew that Volkswagen diesel vehicles did not comply with US emissions rules when these securities were sold, but simply repeats unproven claims about Volkswagen AG’s former CEO, who played no part in the sales.”
The SEC suit seeks to recover “ill-gotten gains” through civil penalties and fines, and also calls for Winterkorn to be barred from serving as a director of a US company.
Volkswagen has already paid more than £18.8 billion in the US in criminal and civil fines and other settlements relating to Dieselgate. It is currently defending its actions in an ongoing court case in Germany, where investors are pursuing around £8.2 billion in damages.
Source: Autocar Online