Norway sovereign fund to sue Volkswagen over emissions scandal

Norway's massive sovereign wealth fund is to sue car maker Volkswagen over its cheating on emissions testing, the Financial Times reported.

The $850bn fund wants to join a class action suit in the German courts, the reported cited Petter Johnsen, chief investment officer for equity strategies at Norges Bank Investment Management, the manager of the oil fund, as saying.

“We have been advised by our lawyers that the company’s conduct gives rise to legal claims under German law. As an investor it is our responsibility to safeguard the fund’s holding in Volkswagen,” Johnsen said.

The lawsuit, expected to be filed in the coming weeks, the report said. The fund holds a 1.64% stake in VW’s ordinary voting shares, according to Bloomberg data and is the biggest investor not to hold a seat on the carmaker’s supervisory board. Its holding was worth $750m at the end of last year.

The emissions scandal first came to light last September and has led to VW making €16bn in provisions already to cover potential payouts. There are several class-action lawsuits in the US and Germany as well as a legal dispute in the Netherlands involving multiple institutional investors.

The oil fund is still deciding which of the actions to back in Germany, a jurisdiction it has chosen because that is where it holds most of its stake in VW rather than through American Depositary Receipts. It is estimated to have suffered losses running into hundreds of millions of dollars on its stake since last autumn and is seeking compensation for this damage, the report said.

It is sceptical about VW’s claim that the defeat devices that helped its diesel vehicles cheat in emissions tests were the work only of rogue employees.

“Volkswagen management should have known about the manipulative engine-management devices,” Johnsen said.

VW is also being sued by the US Department of Justice, the Federal Trade Commission and its own dealers, among others. It offered to buy back 480,000 cars in the US and provide money for a fund promoting green automotive technology in April as part of a provisional settlement in one of its main legal cases.