Volkswagen’s largest shareholder, Porsche SE, is being sued over the car manufacturing company’s diesel emissions.
The plaintiffs are undisclosed at the time of this article, but claim to be shareholders of Volkswagen AG. The lawsuit was revealed in the company’s half-year report. A similar suit in 2018 required testimony from various former Volkswagen executives.
The lawsuit follows Volkswagen’s admission of cheating diesel engine emission tests in 2015. To date, it has cost the manufacturer more than 32 billion Euros in fines and legal costs. It appears that the scandal continues to run up Volkswagen’s bill. This is in addition to the 4.1 billion Euros in shareholder claims that Volkswagen has been saddled with. In July, Volkswagen settled claims filed by shareholders against former executives, including previous CEO Martin Winterkorn.
While the claim of the lawsuit is not clear, it was filed in the Supreme Court of the State of New York and appears to seek damages. It also includes complaints against former members of the management boards of Porsche SE and Volkswagen.
As of 2019, Volkswagen owned 70% of America’s passenger-car diesel market. It installed deceitful software on about 11 million of its cars worldwide that used alternative inputs to circumvent a diesel emissions standard set by the Environmental Protection Agency. The technology also allowed Volkswagen to pass of its engines as using ‘clean diesel.’
Some Audi and Porsche models also use the same software to skirt EPA regulations.
In 2016, a U.S. District Court Judge ordered Volkswagen to issue a nearly $15 billion USD settlement and notified current owners of a $10 billion USD buyback program. Through the end of that same year, roughly 75% of owners affected indicated their interest in being compensated for Volkswagen’s violation.
Bosch, the issuer of the software, also settled for nearly $328 million USD in the same year.
Currently, Porsche SE stock is expected to continue a steady uprise of about 8% over the next year. Despite the lawsuit, historically Porsche SE is presenting a lower risk than usual.
It is unclear if this lawsuit will impact Porsche SE’s stocks moving forward. In the past, public perception regarding the emissions scandal did not appear to weigh heavily on Volkswagen stocks. However, as the world increasingly trends towards environmental favoritism, Volkswagen may experience a different story this time.