Volkswagen apologises to shareholders in Hannover AGM

Shareholders are expected to use the AGM in the northern city of Hanover to let off steam at the way management has handled the affair.

By: AFP | Hanover | Published: June 22, 2016 9:10:49 pm
Volkswagen, Volkswagen emissions, volkswagen emission cheating, emission cheating scandal, volkswagen shareholders, volkswagen chairman, mathias mueller, mathias, muller, volkswagen chairman mueller, world business news, Hannover, world market news Volkswagen shareholders are reflected in the company’s logo as they make their way to the shareholder meeting in Hanover, Germany June 22, 2016. REUTERS/Fabian Bimmer

The boss of embattled German auto giant Volkswagen today issued an apology to angry shareholders over the emissions cheating scandal that has plunged the group into an unprecedented crisis.

Facing an annual general meeting for the first time since the scandal erupted in September, Matthias Mueller said: “On behalf of the Volkswagen Group and everyone who works here, I apologise to you shareholders for your trust in Volkswagen being betrayed.

“This misconduct goes against everything that Volkswagen stands for,” he added nine months after the start of the “Dieselgate” affair, when it emerged VW had installed emissions-cheating software into 11 million diesel engines worldwide.

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Volkswagen is still far from drawing a line under the scandal, with the costs of the affair still incalculable while it remains unclear if VW’s own internal investigation will pinpoint the major culprits behind the scam.

And the auto giant, which owns 12 brands ranging from Volkswagen and Porsche to Audi and SEAT, still faces a myriad of regulatory fines and lawsuits from customers and shareholders.

Shareholders are expected to use the AGM in the northern city of Hanover to let off steam at the way management has handled the affair.

Two days ahead of the meeting, prosecutors provided more fodder to the irate shareholders when they said they were investigating former VW boss Martin Winterkorn for having allegedly manipulated the market by holding back information about emissions cheating at the car giant.

A second former member of the board was also under probe, prosecutors said, without giving the individual’s name, but a Volkswagen spokesman told AFP that the suspect was Herbert Diess — who is in charge of the VW brand.

Listed companies are required to disclose information that could affect market prices immediately.

But VW complied with its disclosure obligation only on September 22, 2015, prosecutors said, four days after US regulators went public that they were charging the company for emissions cheating.

The allegations struck at the heart of shareholders’ misgivings, as they have since early on in the scandal also accused management of dragging their feet in informing them about the scam, which led to a stunning 40-per cent drop in the company’s share price last autumn.

The stock has since recovered somewhat, but is still 26 per cent below the levels before the scandal broke last September, and the company’s finances also remain weak.

After it was forced to set aside 16 billion euros (USD 18 billion) in provisions to cover the costs of the affair so far, it sank to a net loss of 1.6 billion euros, its first loss in two decades.

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