A foundation will bring together affected from 23 countries that will claim initially 60 Euros per share
DAVID ARROYO, MADRID
Shareholders from 23 countries are joining a class action lawsuit against Volkswagen for its potential obligation to indemnify that the company may have after the fall of the listing of its securities after the affair of diesel. The original intention of this foundation or stichting, as it’s know in the legal field, is to propose a settlement to Volkswagen for the compensation of private shareholders who bought shares before September 15, 2015, date on which the problem was uncovered. As an initial reference assessment, the foundation estimates a price of 60 Euros per share, which is subject to continuous review and may vary slightly depending on each country.
This is not the first class action that Volkswagen faces for the same cause. First was the German Association for the Protection of the Investor which announced it was preparing an action like this, but only for German shareholders, and up to 66 institutional investors in the US and UK also announced the filing of another cause. Investors who have made the purchase of securities in Europe can’t go to US courts.
At first sight this might seem as a detriment to the manufacturer, but it may be not. It is true that the company have to make a financial outlay, but it is also true that considering all the lawsuits that it have to deal globally and the economic and image damage that it suppose, it is possible that it better face a united and joint solution with which it can close the process in a quick manner.
In Spain, the organization that polarizes this activity is the Spanish Association of Minority Shareholders (SAMS), which has been attached to the creation of a foundation in the Netherlands to file this complaint. The reason why the seat is in the Netherlands is because there is a procedural system which allows the jurisdiction to be exercised at the European market level, not at the level of each country. One member of the Supervisory Board of this foundation is the Spanish lawyer Javier Cremades, of the Cremades Calvo-Sotelo firm, who is also general secretary of SAMS.
The Foundation collaborates with the World Federation of Investors and International Financial Litigation Network. “We do not intend to go against the company, but narrow the dispute and find the best solution for the parties. The shareholders are not interested in the company to deteriorates, but is strengthened, but this also implies a good solution to a problem that is there” Cremades said.
AT A STROKE
Volkswagen could deny any responsibility -something improbable considering they admitted the manipulation of the software- and therefore is not certain that a judge impose a conviction to the German group. But it is possible that they prefer a solution in this way to settle the problem before there is a conviction that can be far avoided.
For now, this is the only foundation that is collectively facing a solution at European level. In Spain you can channel the claims of up to 500 directly private shareholders, not indirectly through pension funds, for example.
This stichting had already contact the board of the company in Wolfsburg offer them said solution. If manufacturer decided to use this rute, it would offer a solution to the foundation and in return this would contact the shareholder associations.
On the other hand, yesterday the Volkswagen Group appointed Hans-Joachim Rothenpieler new head of Quality Contro, replacing Frank Tuch, who decided to leave the company. Rothenpieler, that occupied positions in the area, will report directly to the CEO Matthias Muller.
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