VW to Rely on Poetsch Testimony in $11 Billion SuitsBy
Company files 600 pages in German investor case over diesel
Carmaker reiterates in court filing it did nothing wrong
Volkswagen AG Chief Financial Officer Hans Dieter Poetsch may testify in a German lawsuit over the diesel-emissions scandal to defuse claims the company was too slow in telling investors about the probe, people familiar with the proceedings said.
The company named him as a witness and Poetsch is willing to testify despite being under investigation by prosecutors about his role in the scandal, according to the people, who declined to be identified because they weren’t authorized to talk about the case publicly. Suspects usually use their right against self incrimination, and anything he says could, in theory, be used against him in a criminal case.
His testimony would come as part of the carmaker’s response to lawsuits seeking as much as 9 billion euros ($11 billion) for the scandal, according to the people. On Wednesday, VW sent a 600-page filing to a court in Braunschweig, Germany, that is hearing the cases.
About 1,600 lawsuits are pending in the town about 20 miles away from Volkswagen’s Wolfsburg headquarters. Investors say they lost money on VW shares because the company was slow in disclosing the issue before September 2015, when it admitted using software to cheat emissions tests on 11 diesel models. VW has already paid out more than 25 billion euros in fines, settlements and other costs, and still faces more criminal probes and suits.
VW fulfilled all its disclosure duties, company spokesman Nicolai Laude said Thursday in an e-mailed statement. Norbert Scharf, Poetsch’s defense lawyer, didn’t immediately reply to an email seeking comment.
In the filing, VW reiterates that until Sept. 22, 2015, it wasn’t able to get a full picture of the risk involved in the American probe into its use of computer software to defeat diesel emissions tests, and had no obligation to alert investors before then. Prior to the U.S. government’s surprise decision on Sept. 18 of that year to disclose that VW faced fines that could total $18 billion, the company assumed it was faced fines of less than 300 million euros.
Poetsch had estimated the risk at 150 million euros, VW argues in the filing. A penalty of that size wouldn’t have been market-moving or require a statement to the markets.
In court documents, VW repeats that the diesel deception was started by a small group of engineers, and that top managers knew nothing about it. While then-Chief Executive Officer Martin Winterkorn got a memo in May 2014 that said the U.S. might ask questions about the software, it wasn’t clear that he needed to take further action. A company lawyer told Poetsch about the probe a year later.
The top managers who learned more and more about the issue during the course of 2015 were continuously told that the issue was under control, VW says in the filing.