Porsche SE Ordered to Answer Key Questions on VW Diesel Cheating

January 12, 2018 at 4:00 PM

A panel of German judges in Stuttgart has ordered Porsche Automobil Holding SE to answer certain shareholder questions about its knowledge of Volkswagen AG’s diesel emission cheating scandal.

Porsche SE controls 52% of VW’s voting shares. Reuters reports that the court sharply criticized the senior management of both companies for their handling of the crisis.

The court ordered the holding company to answer five questions. But it rejected investor requests to force a response to 49 other queries, Reuters says. Porsche SE has so far refused to tell shareholders when its executives learned about VW’s development and use of software to cheat on pollution certification testing.

The answers could cost VW and the holding company billions of euros. The companies face multiple investor lawsuits about shareholder losses caused by management that failed to promptly alert them to the diesel scandal.

The judges condemn management for failing to halt employees from destroying documents that could have helped an investigation of the cheating by U.S. law firm Jones Day. They also say the holding company’s board committed a “grave violation” by not launching it own investigation into how VW handled the crisis.

The top management of both companies have been reluctant to offer details about who knew what as the scandal surfaced in September 2015. Critics have complained since the beginning that VW management seemed unenthusiastic about investigating the cheating but eager to dismiss the problem as the work of a few low-level managers.