Volkswagen needs to do more to regain the confidence of investors in the wake of its emissions scandal, despite a swift recovery in earnings, several shareholders told the German carmaker at its annual meeting on Wednesday.
The world’s largest automaker reported better-than-expected first-quarter profits and has announced a raft of plans to recover from the biggest business crisis in its history, including cost cuts and investment in cleaner cars.
But some shareholders said its emissions test cheating on diesel engines would continue to haunt it for years if it did not publish the results of an investigation into the scandal, address outstanding claims and improve corporate governance.
“I am shocked and speechless, that was the case at the time and it still is today,” said Gerd Kuhlmeyer, head of staff shareholders group Community of VW, referring to a scandal that broke 20 months ago. “An end of ongoing investigation proceedings and possible further effects is not in sight.”
Volkswagen (VW) has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.
But it still faces billions of euros in claims from about 3,500 customer lawsuits and about 2,000 investor suits globally.
The German group, which is tightly controlled by its founding families and home state of Lower Saxony, rejected calls by Kuhlmeyer and other investors for it to publish the results of a company-commissioned investigation by U.S. law firm Jones Day into the scandal, saying it couldn’t for legal reasons.
“There is no written concluding report by Jones Day and there will not be one,” VW Chairman Hans Dieter Poetsch said.
“I ask for your understanding that VW for legal reasons is prevented from publishing such a final report,” he told the gathering of about 3,000 shareholders.
TRUST
The carmaker initially pledged to inform shareholders about the findings of the Jones Day report which was used as the basis for a $4.3 billion settlement with the U.S. Justice Department, but has since abandoned this plan.
It says the report was incorporated in the “statement of facts” published by the Justice Department, and that as part of the settlement deal it cannot publish separate findings.
But some shareholders criticized this explanation.
“Your reference to the statement of facts agreed in the U.S. is completely insufficient and almost insulting to all those who are interested in complete clarification of responsibilities,” said Christian Strenger, supervisory board member at DWS Deutsche Asset Management GmbH.
Hermes EOS, representing large institutional investors, called on VW to seek agreement with U.S. authorities to be allowed to publish at least a summary of Jones Day’s findings.
“That’s the only way to regain lost trust with investors and to win back customers,” Hans-Christoph Hirt, head of Hermes EOS said. “Only then, it can be found out whether the company is drawing the right conclusions.”
VW shares have bounced back from their post-scandal lows, but are still trading below the level when it broke in September 2015. At 1500 GMT, the stock was up 0.2 percent at 144.6 euros.
Separately, Chief Executive Matthias Mueller said VW would support without reservation Larry Thompson, a former U.S. deputy attorney general, who has been picked by the Justice Department to oversee the company for three years.
Thompson and his team will have access to VW documents and assess the efforts of its board of management and senior management to comply with environmental laws.
“I see this as an opportunity,” Mueller said. “The work of the monitor can and will contribute to bringing risk management, compliance and integrity within the group to new levels.”