VW ordered to appoint independent auditor over Dieselgate as it goes slow on ‘fixes’

09 November 2017

A German court has ruled that an independent auditor should be appointed to Volkswagen (VW) to look into its cheating of US emissions tests during the Dieselgate scandal.

A number of investors are seeking billions of Euros in damages from the vehicle manufacturer, with lobby groups the DSW and SdK in its home country requesting the appointment of a special auditor, something the car maker’s main shareholders, the Porsche-Piech families and the state of Lower Saxony, had blocked.

However, a regional court in Celle, around 34 miles from the manufacturer’s Wolfsburg base, has now said that an independent auditor must be appointed, in a decision that is legally binding and cannot be appealed.

When the scandal broke in 2015, VW appointed US-based legal company Jones Day as well as advisory firm Delotte to investigate the circumstances of its actions, as well as who was responsible. However, while the firm promised to be transparent on the matter, it has thus far refused to release the findings of the report, despite repeated requests to do so. The significance of the report is that it was used as part of the $4.3 billion (€3.7 billion) settlement with the US Justice Department over the wrongdoing.

′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.

Meanwhile, the German manufacturer has yet to fix one in three of the 1.2 million cars affected by the diesel scandal in the UK. While affected drivers in the US have been offered compensation, VW denies any wrongdoing in Europe, offering a fix to remove potentially installed software instead.

The British parliament’s Environmental Audit Committee said that Volkswagen had slowed the pace of its work in recent months and called on the transport ministry to take action.

′It is over two years since the VW emissions scandal was discovered, a third of vehicles have yet to be fixed and rates have slowed considerably,’ said committee Chairwoman Mary Creagh, a lawmaker for the opposition Labour Party. ′We have written to the Department for Transport to ask what action they are taking in response to the stalled progress.’

Volkswagen said it had made technical changes to 810,134 cars out of just under 1.2 million in Britain but that as the process was voluntary, rather than a safety recall, it may never fix every single model.

However, another reason for the slow uptake may be due to reluctance on the part of drivers to have the fix done. Various reports have suggested that the steps taken to remove the software have made vehicles worse, causing increased fuel consumption and premature wear on various parts linked to the emissions system of the vehicle.

Photograph courtesy of Volkswagen Group