Energy
VW Shareholders Call For Major Reforms After Dieselgate Arrests
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Volkswagen shareholders are pushing for major reforms after the German automakers admitted to attempting to defraud the U.S. government in cheating on emission tests.
VW executives and employees were charged in a 10-year conspiracy to dupe regulators about the levels of nitrogen oxides (NOx) levels the company’s diesel vehicles emitted. The criminal charges and legal hassles, which culminated with VW agreeing to a $4.3 billion settlement, prompted various investors to call for reforms.
“For senior management to receive any bonuses in 2017, we would now expect VW to deliver a dramatic improvement in profits,” Ben Walker, partner at activist hedge fund TCI, told reporters Thursday. Walker’s company criticized VW in 2016 of engaging in corporate excess related to the emission cheating scandal.
“What is most disturbing… is the pattern of deception, both in developing and perfecting the defeat devices, as well as deliberately obstructing the subsequent investigation,” said Annie Bersagel, an adviser for responsible investments Kommunal Landspensjonskasse, a mutual insurance company based out of Norway. It has minor investments in VW.
Other investors said they simply want VW to be more forthright going forward with investors.
Ingo Speich, a fund manager at Union Investment with shares in VW, said the automaker must come clean and “put everything on the table” to help regain investor’s trust.
VW forged an agreement with regulated pledging to buy back or fix nearly 83,000 3.0-liter diesel vehicles. It must maintain an 85 percent recall rate or risk dumping more money into a mitigation fund propping up several green energy projects.
Mitigation actions, according to the EPA’s website, include allowing states affected by the tainted vehicles to charge “infrastructure for light duty zero emission passengers”
Investors appeared to take the initial news about the company’s settlement in stride.
VW’s shares skyrocketed 2 percent higher in morning trading Tuesday, the day before the big announcement, ultimately bringing the gain to over 13 percent since the beginning of December.
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