Norway Wealth Fund Will Seek to Join Class Action Against VWby
$850 billion fund says it’s seeking to ‘safeguard’ holding
Big shareholder criticizes VW handling of emissions crisis
Norway’s $850 billion wealth fund will seek to join a class action suit in Germany against Volkswagen AG following revelations the carmaker rigged the exhaust systems of 11 million diesel-powered cars worldwide to pass official emissions tests.
Norges Bank Investment Management “intends to join a legal action against
Volkswagen arising out of that the company provided incorrect emissions data,” fund spokeswoman Marthe Skaar said in an e-mailed statement. The fund, which according to data compiled by Bloomberg owns 1.64 percent in Volkswagen, said it’s acting “to safeguard” its holding in the carmaker.
“It’s the board’s responsibility to ensure accurate and timely information is disclosed to the shareholders,” she said. “Volkswagen informed the public about the incorrect emissions data after U.S. authorities released a notice of violation letter.”
Volkswagen, based in Wolfsburg, Germany, acknowledged last year that it had manipulated diesel engines with a “defeat device” so emission controls switched on only during pollution tests. The scandal has led to the departure of top managers and the biggest loss in the company’s history. It has set aside 16.2 billion euros ($18.3 billion) so far to help cover the costs of the deception, and cut its annual dividend 97 percent.
VW declined to comment on the Norway fund’s intentions. The company has defended its disclosure practices, saying it acted on information available at the time and that the full scope of the crisis wasn’t evident until after U.S. regulators’ notice of violation last September.
Plaintiffs from more than a dozen countries sued Volkswagen in Braunschweig, Germany, in March. They included the California Public Employees’ Retirement System, one of the largest U.S. pension funds. VW’s preferred shares, its most widely traded security, fell 20 percent from Sept. 18 through Friday.
TCI Fund Management, an activist investor, this month sent a letter to the automaker’s board, criticizing the company for what it deems excessive pay in light of poor stock performance even before the emissions scandal emerged.