MUNICH/BERLIN (Reuters) - The German state of Bavaria said on Tuesday it would sue Volkswagen VOWG_p.DE for damages caused by its emissions-test cheating scandal, the first regional government in VW's home country to take legal action against the carmaker.
Bavaria’s state pension fund for civil servants lost as much as 700,000 euros ($780,00) after VW shares plunged in the wake of the Sept. 18 revelation by U.S. regulators of the carmaker’s manipulation, a spokeswoman at the Bavarian finance ministry said.
Bavaria, home to German blue-chip companies including BMW, Siemens and Allianz, owned about 58,000 VW preference shares when news of the scandal broke, she said.
Europe’s largest automaker is also caught up in legal action in the United States, South Korea and elsewhere and is facing billions of dollars in costs related to its emissions-test manipulations, making it the biggest scandal in VW’s history.
Bavaria’s pension fund lost out from the fall in the shares, Bavarian Finance Minister Markus Soeder said. “We want this money back,” said Soeder, a member of the Christian Social Union sister party of Chancellor Angela Merkel’s Christian Democrats, in comments to German news agency Deutsche Presse-Agentur (DPA) confirmed by his spokeswoman.
Soeder said Bavaria’s pension fund would file its suit against VW in September at the regional court of Braunschweig near VW’s Wolfsburg headquarters in the state of Lower Saxony, according to DPA which reported the legal action earlier on Tuesday.
VW declined to comment.
Another of Germany’s 16 federal states, Lower Saxony, is VW’s second biggest shareholder and has a veto power on the carmaker’s supervisory board. In June it withheld backing for VW’s former chief executive Martin Winterkorn and current brand chief Herbert Diess in a vote to ratify the actions by both men in 2015 when the scandal came to light.
Winterkorn and Diess are the subject of a probe by Braunschweig prosecutors who are also investigating more than a dozen lower-level VW managers over the scandal.
But VW’s home state expressed scepticism about the prospect of legal action such as Bavaria’s succeeding.
It remains to be seen whether Bavaria will seek damages for losses incurred because of the fall in VW’s share price or whether the state will claim that a violation of disclosure rules on behalf of VW caused the financial damage, state finance minister Peter-Juergen Schneider said in an emailed statement.
“Lower Saxony is a strategic investor (in VW),” Schneider said. “Trading with shares was not and is not intended. Therefore, it’s questionable whether a potential violation of ad-hoc rules even caused material damage.”
Baden-Wuerttemberg, where Daimler and VW’s sports-car brand Porsche are headquartered, has been pondering legal action against VW, a spokeswoman for the state finance ministry said, adding it held about 65,000 VW preference shares when the scandal broke.
Reporting by Joern Poltz and Andreas Cremer Additional reporting by Till Weber; Editing by Jane Merriman/Ruth Pitchford
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