Legal dispute: what did Porsche SE know?

In the affair of manipulated diesel vehicles at Volkswagen, the former chairman of the board, Martin Winterkorn, presumably plays a leading role. From 2009 to October 2015, the Swabian was also CEO of the parent company of Europe's largest car manufacturer, the Stuttgart-based Porsche SE (PSE), which has been the focus of a process under the Investor Model Procedure Act before the local Higher Regional Court since Wednesday. It deals with the consequences of the diesel debacle at Volkswagen and its effects on the parent company. The Wolfsburg-based company had manipulated diesel engines to make the pollutant emissions appear lower than they really were.

At the start of the procedure in the Filderhalle in Leinfelden-Echterdingen, Winterkorn's name was often mentioned. “If Winterkorn knew something for VW, did it also know something for Porsche?” Asked Judge Stefan Vatter, chairman of the 20th Civil Senate, casually - without giving an answer. In the legal marathon of the VW diesel scandal, the investor sample procedure against PSE is another building block. The pivotal point is, among other things, the following question: If the holding company, which is controlled by the Porsche and Piëch families and holds a good 53 percent of the ordinary shares of VW, had informed its shareholders about the extent of the affair at Volkswagen earlier than September 2015 have to? The plaintiffs arguethat - in ignorance of the diesel fraud - they paid too much money for their PSE shares years ago. Their argumentation: If VW and the holding company had informed the markets earlier, it would have depressed the share price earlier and they would have had to pay less for their shares.

Litigation can take longer

It is also controversial whether and under what circumstances PSE, as the VW umbrella company, was even obliged to publish mandatory stock market notifications about price-relevant transactions at VW.

With a view to Winterkorn's dual role, PSE lawyer Markus Meyer notes that Winterkorn regularly took documents home with him.

The fact that he had read it would not interest the capital market.

PSE also points out that it does not have its own operational business.

It was not a car maker and was not involved in the development, manufacture or sale of the diesel engine that had become conspicuous in the USA.

You and Volkswagen reject any allegations.

The judges in Stuttgart had initially strictly refused to open their own test case. You referred to an ongoing process by the Sparkasse fund house Deka Investment against VW and PSE in Braunschweig. The Federal Court of Justice overturned this Swabian decision and instructed the civil senate in the state capital to conduct its own proceedings.

That was won by the Frankfurt law firm Nieding + Barth, which now represents the British pension fund Wolverhampton in Stuttgart. Lawyer Klaus Nieding is optimistic with reference to the BGH decision. The prospects of success are there, he says at the start of the negotiations. He reckons that the entire litigation could last up to five years. The proceedings will probably end up at the Federal Court of Justice in Karlsruhe. Both sides are sure of that. The model plaintiff asserts a claim of 5.7 million euros. In addition, there are other plaintiffs as so-called parties to the proceedings, so that the claims for damages total 8 million euros.

Until the proceedings have been decided, all other lawsuits against PSE in Stuttgart have been suspended. According to the VW parent company, 199 proceedings are pending before the Stuttgart Regional Court, two proceedings before the Stuttgart Higher Regional Court and 30 proceedings before the Braunschweig Regional Court. The claim is for damages of around 1.1 billion euros plus interest. The OLG does not negotiate the amount of individual claims - it investigates the question of whether the plaintiffs are entitled to compensation at all. Even today there are still close personal ties between Volkswagen and the holding company. PSE CEO Hans Dieter Pötsch is head of the VW supervisory board. At the start of the process, organizational issues were mainly addressed. There is now a pause lasting several months.Negotiations will not take place until November 9th and 10th.