Investors deliberate suits against Volkswagen 5/5 (3)

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Source: www.youtube.com

In a recent development of the Volkswagen Crisis, European shareholders of the giant carmaker have started discussing the possibility of claiming compensation for their losses in the last few days. Investors lost money in billions (in euros) as shares fell by more than thirty per cent of market value, after the company admitted to rigging diesel emissions tests in US.

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Volswagen share prices in the last 5 days                                        Source: www.linkedin.com

Collective litigation is tougher in Britain than in US, where 25 consumer class action suits have already been filed from car owners throughout US. The litigation, if pursued, will be a long drawn out process and investor claims will depend partly on jurisdiction. To win, investors will have to prove that the top management knowingly and intentionally misled them and consequently caused them great losses. If the shareholder lawsuit against RBS is any indication, it will take years to prepare the case against Volswagen and more before the investors see a penny of their compensation, if at all.

The scandal resulted in a loss of 25 billion dollars of the company’s market value and the resignation of its chief executive on Wednesday; not to mention its loss in goodwill and brand value amidst great public outrage and loss of faith.

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