Volkswagen’s Top Brass Is Having Trouble Placating Angry Shareholders
Volkswagen executives apologized for the diesel emissions scandal to try to placate angry shareholders at a meeting on Wednesday and pledged change to haul the carmaker out of its worst business crisis.
Europe’s largest automaker was holding its first annual shareholders meeting since admitting in September to cheating U.S. diesel emissions tests in a scandal that risks costing the company tens of billions of dollars.
“We sincerely regret that the diesel issue is casting a shadow on this great company,” Chairman Hans Dieter Poetsch told the meeting in Hanover.
“It is all the more painful, for you, for us, and for me personally that rules were broken and ethical boundaries transgressed,” Chief Executive Matthias Mueller told the meeting of about 3,000 shareholders.
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Shareholders have strongly criticized a recommendation by VW’s supervisory and management boards to ratify the actions of executives in 2015 at the meeting, a common move at German companies which amounts to a symbolic vote of confidence
Shareholders demanded that Poetsch, VW’s former finance chief, be replaced as chair of the meeting which is expected to run into the late evening, but the motion was voted down.
“We are looking at a shambles,” said Ulrich Hocker of Germany’s DSW association of private investors, saying the decision to rig the emissions tests was a “collective failure” by the nine-member management board.
VW’s supervisory and management boards recommended last month that shareholders endorse the former top management board, because an investigation into the scandal had until then failed to uncover potential wrongdoing by senior managers.
But prosecutors in Braunschweig near VW’s Wolfsburg headquarters are now investigating former CEO Martin Winterkorn and VW brand chief Herbert Diess over whether they effectively manipulated markets by delaying the release of information about the test cheating.
A source told Reuters on Tuesday VW’s supervisory board has chosen to back the previous recommendation because internal investigations so far have shown that no former management board member was in serious breach of duties in 2015.
Diess, the former BMW development chief hired last July to turn around the troubled VW brand, has the backing of the supervisory board despite the inquiry, the person said.
VW declined to comment.