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Volkswagen and former boss face US lawsuit over Dieselgate

Volkswagen and former boss face US lawsuit over Dieselgate
Business
The Securities and Exchange Commission (SEC) claims the firm misled investors by issuing billions of dollars worth of bonds and securities, without disclosing that the company had cheated emissions tests.

Volkswagen s former chief executive Martin Winterkorn is also being sued.

The firm said it would contest the SEC lawsuit vigorously.

VW first admitted in September 2015 that it had used illegal software to cheat US emissions tests. But between April 2014 and May 2015 the carmaker had sold $13bn (£10bn) of bonds and securities to US investors, at a time when executives were already aware that illegal software had been installed to manipulate emissions tests, according to the SEC s suit.

The SEC said that as a result, Volkswagen "reaped hundreds of millions of dollars in benefit by issuing the securities at more attractive rates for the company".

The firm "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.

The suit seeks to bar Mr Winterkorn, who resigned when the scandal became public, from serving as an officer or director of a public US company. He has been charged in the US with conspiring to cover up the emissions cheating scandal. However Germany does not extradite its own citizens.

The suit also seeks to recover "ill-gotten gains" along with civil penalties and interest.

Volkswagen has already agreed to pay more than $25bn in the US over the emissions scandal including criminal and civil fines.

The firm said in a statement the SEC complaint was "legally and factually flawed".

It said the securities in question had been sold "only to sophisticated investors who were not harmed and received all payments of interest and principal in full and on time" and said that Mr Winterkorn had played no part in the sales of those securities.
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