(Repeats to add link to updated TIMELINE)
* VW admits criminal offences, to pay $4.3 bln in U.S. fines
* VW admits 40 staff destroyed documents to conceal cheating
* Investor wants more independent directors, bonus clawbacks
* U.S. attorney general still pursuing more VW executives
By Edward Taylor
FRANKFURT, Jan 12 Volkswagen
investors demanded greater transparency and reforms at the
carmaker after it admitted to criminal offences in rigging U.S.
emissions tests and U.S. prosecutors indicted six current and
former managers over the scandal.
The German company agreed to pay $4.3 billion in civil and
criminal fines in a settlement with the U.S. Justice Department
on Wednesday, the largest ever U.S. penalty levied on an
Volkswagen (VW) admitted about 40 employees at its VW and
Audi brands deleted thousands of documents in an effort to hide
from U.S. authorities the systematic use of so-called defeat
devices to rig diesel emissions tests, a scale of wrongdoing
that led some investors to call for deep reforms.
"What is most disturbing ... is the pattern of deception,
both in developing and perfecting the defeat devices, as well as
deliberately obstructing the subsequent investigation," said
Annie Bersagel, an adviser for responsible investments at
Norwegian Mutual Insurance company Kommunal Landspensjonskasse
(KLP). KLP and KLP mutual funds have small investments in both
VW equities and fixed income products.
"Going forward we would like to see more truly independent
directors. This may change governance at the company where we
see some issues, for example the awarding of large bonuses to
current and former managers. We would like to see a clawback
provision relating to violations."
Ingo Speich, a fund manager at Union Investment which holds
about 0.6 percent of VW preference shares, said on Wednesday the
company needed to "put everything on the table" about its
wrongdoing to regain the trust of investors.
VW still faces lawsuits from about 20 U.S. states and from
U.S. investors, and will spend years buying back or fixing
nearly 580,000 polluting U.S. vehicles. It also faces claims
from customers in Europe and Asia, after it admitted in
September 2015 that up to 11 million vehicles worldwide could
have defeat device software installed.
So far, the scandal has cost VW up to $22 billion in the
United States alone, in deals with owners, regulators, U.S.
states and dealers. Despite the fines, VW has continued to pay
bonuses to top managers.
For 2015, the year the scandal was uncovered, VW agreed to
pay 12 current and former members of the management board at
total of 63.2 million euros ($67.2 million) in fixed and
flexible remuneration. It said board members would have 30
percent of their variable bonus awards withheld, if the share
price remained below 140 euros.
VW shares are currently trading at 151.89 euros.
SIX EMPLOYEES INDICTED
In total, six current and former VW managers have been
indicted, including Heinz-Jakob Neusser, former head of
development for the VW brand. Five of them are in Germany and it
is unclear if they will come to the United States to face
charges since Germany typically does not extradite its citizens.
While senior managers, none of them are - or were - members
of VW's management board.
At a press conference in Washington, U.S. attorney general
Loretta E. Lynch said U.S. authorities would continue to pursue
those responsible for emissions cheating.
"This announcement does not mean that our investigation is
complete ... We will continue to pursue the individuals
responsible for orchestrating this damaging conspiracy," Lynch
The indictment said the six managers engaged in a 10-year
conspiracy to cheat U.S. emissions tests and then cover up
excessive emissions even as regulators questioned
VW Chief Executive Officer Matthias Mueller said in a
statement the company "deeply regrets the behaviour that gave
rise to the diesel crisis" and vowed to continue changes in how
the company operates.
See graphic on emissions affair: (tmsnrt.rs/2fYcm9Q)
See timeline on emissions affair:
($1 = 8.5018 Norwegian crowns)
($1 = 0.9403 euros)
(Additional reporting by Andreas Cremer; Editing by Mark