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Norwegian fund to sue Volkswagen

Do Not UseDo Not Use 16/05/2016
VW sign: Around 11 million vehicles globally have been fitted with the so called "defeat devices" © Getty Images Around 11 million vehicles globally have been fitted with the so called "defeat devices"

Norway's sovereign wealth fund, the world's largest, plans legal action against Volkswagen over the firm's emissions scandal.

It said it had been advised by lawyers that the company's conduct "gives rise to legal claims under German law".

Volkswagen admitted last year that it had installed secret software to cheat US emissions tests.

The move, from one of VW's biggest investors, is the latest in a flood of legal actions over the scandal.

It faces action from US Department of Justice, the Federal Trade Commission and its own dealers.

Norges Bank Investment Management is worth $850bn (£592bn; €751bn) and has stakes in more than 9,000 companies.

According to the Financial Times, which first reported the story, the lawsuit is expected in the coming weeks. It will be filed in Germany, joining class-action cases which are being prepared there.


"Norges Bank Investment Management intends to join a legal action against Volkswagen arising out of [the fact that] the company provided incorrect emissions data," the statement said.

"As an investor, it is our responsibility to safeguard the fund's holding in Volkswagen."

Volkswagen has put aside some €16.2bn to pay for the emissions scandal.

Last month the German carmaker reached a deal with US authorities in which it agreed to offered to buy-back almost half a million vehicles and provide money for a fund to help develop cleaner car technology.

The Norwegian fund recently announced action to clamp down on excessive executive pay at the companies it invests in, as well as encouraging oil firms to report more on the risks of climate change.


The planned legal action against VW is part of the fund's wider strategy for its investments to be "much more ethically and environmentally conscious", said Christian Stadler, professor of strategic management at Warwick Business School.

However, he added, it was also a part of its campaign for minority shareholders to be given more of a say in German corporate governance.

"It has had disputes with Volkswagen for many years over its governance, as the Porsche family are effectively able to do what they want; as the largest shareholder, they really only have to consider the State of Lower Saxony, which has a 20% holding, and is where the company is headquartered.

"In Germany, minority shareholders don't have much of a voice, which is something the fund has campaigned against before, as 4% of its equity is in Germany," added Prof Stadler.

"It will not divest in Volkswagen, but wants to working towards changing its corporate governance structure."

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