March 16, 2019

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Volkswagen and former boss face US lawsuit over Dieselgate

Martin Winterkorn, former CEO of VW Image copyright
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Former VW chief Martin Winterkorn is being sued by US authorities

The US is suing Volkswagen, accusing the German carmaker of “massive fraud” over the diesel emissions scandal.

The Securities and Exchange Commission (SEC) claims the agency misled buyers by issuing billions of {dollars} value of bonds and securities, with out disclosing that it had cheated emissions exams.

Volkswagen’s former chief government Martin Winterkorn can also be being sued.

The firm stated it might contest the SEC lawsuit vigorously.

VW first admitted in September 2015 that it had used unlawful software program to cheat US emissions exams. But between April 2014 and May 2015 the carmaker bought $13bn (£10bn) of bonds and securities to US buyers, at a time when executives have been already conscious that unlawful software program had been put in to control emissions exams, in response to the SEC’s go well with.

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The SEC stated that consequently, Volkswagen “reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company”.

When the scandal was uncovered, VW’s share worth sank practically 40%.

The agency “repeatedly lied to and misled United States investors, consumers, and regulators as part of an illegal scheme to sell its purportedly ‘clean diesel’ cars and billions of dollars of corporate bonds and other securities in the United States,” the SEC added.

Image copyright
Getty Images

The go well with seeks to bar Mr Winterkorn, who resigned when the scandal grew to become public, from serving as an officer or director of a public US firm. He has been charged within the US with conspiring to cowl up the emissions dishonest scandal. However Germany doesn’t extradite its personal residents.

The go well with additionally seeks to get well “ill-gotten gains” together with civil penalties and curiosity.

Volkswagen has already agreed to pay greater than $25bn within the US over the emissions scandal together with legal and civil fines.

The agency stated in an announcement the SEC grievance was “legally and factually flawed”.

It stated the securities in query had been bought “only to sophisticated investors who were not harmed and received all payments of interest and principal in full and on time” and stated that Mr Winterkorn had performed no half within the gross sales of these securities.

The carmaker is already defending its actions in courtroom in Germany, the place buyers are pursuing €9.26bn (£8.2bn) in damages, arguing the corporate ought to have come clear earlier concerning the emissions exams dishonest. That case is anticipated to final till later this yr.

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