Independent auditor should investigate VW scandal, German court rules on World Auto Source

Independent auditor should investigate VW scandal, German court rules

BERLIN -- Investors seeking billions of dollars in damages from Volkswagen Group were given a boost when a German court ruled an independent auditor should be appointed to investigate the automaker's emissions scandal.

VW's main shareholders, the Porsche-Piech families and the state of Lower Saxony, had blocked requests by the DSW and SdK investor lobby groups for a special auditor to look into its cheating of U.S. diesel engine tests. But a regional court in Celle, about 54 km (34 miles) west of VW's Wolfsburg base, said on Wednesday such an auditor must be appointed in a decision that is legally binding and cannot be appealed by the carmaker.
Shortly after the diesel scandal broke in September 2015, VW hired U.S. law firm Jones Day and advisory firm Deloitte to investigate the circumstances of its wrongdoing and who was responsible. Although VW had pledged to improve transparency, it never published the findings which was used as the basis for a $4.3 billion settlement with the U.S. Justice Department.
"This is an extremely good day for the VW shareholders who have lost a lot of money in the wake of the diesel scandal," DSW Vice President Klaus Nieding said. "At last, light will be shed on the darkness that has shielded VW for so long."
VW said in an emailed statement that it had taken note of the court decision, which it described as "unfounded," adding it would carefully consider further steps.The auditor will also examine when VW's top management board first learned of the test cheating and whether it disclosed the possible financial damage to investors promptly.German securities law requires firms to publish any market sensitive news in a timely fashion. The matter is also being investigated by German prosecutors.VW has said it believes its management complied with obligations under German disclosure rule