NPS confirmed to join €3.2 bn joint lawsuit against Volkswagen

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Sep 30, 2016 (Gmt+09:00)

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South Korea’s National Pension Service (NPS), the world’s third-largest pension scheme, has joined the California pension fund CalPERS and other institutional investors in a €3.2 billion joint lawsuit against Volkswagen AG in Germany in connection with the carmaker’s diesel emissions scandal, an NPS source confirmed on Sept. 29.

About 280 institutional investors from across the world lodged the lawsuit at a regional court in Brunswick in VW’s home state of Lower Saxony last March. They claim the carmaker failed to inform investors about the emissions cheating scandal, seeking damages of €3.2 billion.

The lawsuit is the largest-scale joint action brought against the German carmaker. It has been handled by a consortium of law firms, led by Germany’s TISAB and TILP.

In a press release issued in March, TISAB, a sister law firm of TILP, said: “Due to the fact that Volkswagen persistently denies any settlement negotiations and also refuses to waive the statute of limitation defense until now, it was necessary to file this first multi-billion euro lawsuit.”

The amount of damages the NPS is seeking has not been disclosed. At end-2015, NPS held 28.1 billion won ($25.5 million) worth of Volkswagen stocks, about half of 53.3 billion won of shares it had owned at end-2014. A plunge in Volkswagen share prices after the emissions scandal erupted last September and disposal of part of Volkswagen shares had pulled the NPS’ ownership in the carmaker down to 0.05% at end-2015 from 0.12% a year before.

Of the NPS’ overseas stock portfolio, Volkswagen represents a mere 0.04%.

Separately, NPS had filed a civil case in South Korea against debt-laden Daewoo Shipbuilding & Marine Engineering Co. Ltd., its former executives and auditor, and sought damages of about 50 billion won in connection with the shipbuilder’s fabricated financial statements.

By Chang Jae Yoo

yoocool@hankyung.com