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#Volkswagen #DieselGate scandal

EU Reporter Correspondent

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The Volkswagen Investors Claim Foundation ('Stichting') was established under Dutch law at the end of 2015 to provide a tool for investors in the Volkswagen Group who had suffered damage from the company’s long-standing diesel fraud, helping them to recover at least part of their losses.

In order to manage the delicate situation of investors with an interest – in the case of shareholders a proprietary interest – in the long-term prosperity of the company, who have been harmed by the actions of that same company’s board and management, the Foundation has always opted for a negotiated settlement solution as a means of balancing these conflicting interests. The settlement model of Dutch law offered itself as the ideal instrument in Europe to achieve a balanced outcome through negotiation, while at the same time avoiding costly and lengthy litigation.

The World Federation of Investors and BETTER FINANCE, the two leading investor protection associations, have consistently supported this approach, and have reconfirmed their commitment on the occasion of their joint International Conference in Beirut in June.

Regrettably, Volkswagen has so far categorically refused to enter into settlement talks with the Foundation on investor claims in Europe – and has adopted the same stance with other legitimate claims generated in Europe, including the value loss of vehicles equipped with the unlawful emission control devices. This despite having accepted responsibility for these same matters in the United States, and despite having already agreed settlements there to the tune of $30 billion.

The Foundation has repeatedly castigated Volkswagen’s policy towards European claimants as inequitable, unjust and a grave failure of moral responsibility. The policy of denial has prolonged the opprobrium of fraud and moral failure so manifest in the history of the Diesel fraud.

Volkswagen’s board of directors has manifestly been playing for time, relying on the short prescription times which exist in Germany and other European countries and hoping that the claims would thus become ineffective. In the meantime, however, certain legal decisions have increased the pressure on VW. The prosecutor of Braunschweig has forced the company to pay penalties of €1bn on the grounds of unlawful enrichment by collective fraudulent behavior. VW has accepted the fine and, by doing so, has admitted its responsibility. In October of 2018, the higher court of Stuttgart ruled that Porsche must compensate investor claimants for the reduction in market value of their holdings because of the company’s violation of information obligation under the German Capital Market law. This sentence is not yet final, but highly indicative. It heightens the probability that investor lawsuits will be successful in the courts. In addition, a number of VW executives are currently under criminal charges for prior knowledge and fraud.

The strategic situation of the Foundation and its clients has markedly improved in recent months. It has become clear that the company’s policy of denial and prevarication has not had the expected deterrent effect.

Facing the imminent prospect of losing their claims through prescription on 31 December 2018, the registered clients of the Foundation have commenced legal proceedings. Backed by DSW, Germany’s biggest investor representation, the law firm Nieding & Barth, Hausfeld, and the international litigation funder Fortress and Financial Right, more than 1,000 individual claimants and 150 institutional investors have joined this action. These represent estimated claims of more than €1.2bn which are thus shielded from prescription. The new funder has enabled investors to sign on without charge, against a percentage deduction from the eventual settlement. Considerable initial funding had already been provided by the New York law firm Labaton Sucharow.

The lawsuits sponsored by the Foundation are only one part of the financial threat to VW. More than 1,500 other shareholders have registered a form of collective lawsuit in the two German “KapMuG” proceedings. There are also the claims of European bondholders and of European car owners. The figures also do not take account of the possible legal and financial consequences of executive fraud, if proven.

The VW Group, in its Annual Financial Report for 2018, states that the financial risk (Eventualverbindlichkeiten) from pending judicial procedures concerning customers, dealers, employees and investors amounts to €5.4bn, out of which €3.4bn are investor claims; this is reflected in the special reserve the company has set aside.  External sources have however estimated that the total financial risk to VW, if all these procedures come to fruition over the years, is substantially higher and may affect the long-term financial stability of the group.

Given the current judicial situation, the VW management must now proceed on the assumption that it is threatened by billions of potential additional expenses, years of judicial and lawyers’ expenses, judgments, and fines.

In the Foundation’s view, supported by WFI and BETTER FINANCE, this situation offers an even stronger argument that initiation of forward-looking settlement negotiation is timely and beneficial for all parties.

It is now more than ever clear that it is in the best interest of both parties to negotiate a fair settlement for the European VW investors harmed by DieselGate,” said Henning Wegener, chairman of the foundation.

EU

Nine EU-supported films compete in the 2021 Berlin International Film Festival

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The 71st Berlin International Film Festival began on 1 March, this year in its digital edition due to the coronavirus pandemicnine EU-supported films and series, three of which are competing for the highest prize, the Golden Bear: Memory Box by Joana Hadjithomas and Khalil Joreige, Nebenan (Next Door) by Daniel Brühl, and Természetes fény (Natural Light) by Dénes Nagy. The EU supported the development and co-production of these nine titles with an investment of over €750 000 that was awarded through the Creative Europe MEDIA programme. Targeted to film professionals and media, the Berlinale film festival is hosting the European Film Market, where the Creative Europe MEDIA programme is active with a virtual stand as well as with the European Film Forum. The Forum that will take place online on 2 March will gather various professionals from the industry to discuss the future perspectives for the audiovisual sector in Europe. The Berlinale will run until 5 March, when the winning films will be announced. The second round of this year's festival, ‘The Summer Special', will take place in June 2021 and will open the films to the public and host the official Award Ceremony. More information is available here.

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Yemen: €95 million in EU humanitarian aid for people threatened by conflict and famine

EU Reporter Correspondent

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The European Commission is allocating €95 million in humanitarian support to address the most pressing needs of people in Yemen amid record highs of child malnutrition, an imminent threat of famine and renewed fighting. More than 2 million children as well as over 1 million pregnant women and mothers are expected to suffer from acute malnutrition in 2021, while escalating hostilities are forcing thousands of families to leave their households.

The new funding was announced by the Crisis Management Commissioner Janez Lenarčič, at the high-level pledging event for Yemen on 1 March co-hosted by the United Nations, Sweden and Switzerland. Commissioner Lenarčič said: "The EU does not forget the dire situation of people in Yemen who are once again on the brink of famine after bearing the brunt of the world's worst humanitarian crisis. New EU funding will be essential in maintaining life-saving aid for millions of people, exhausted  after a disastrous year marked by fighting, COVID-19 and further economic collapse. Parties to the conflict need to facilitate the access of humanitarian organisations to those most in need and avoid further civilian suffering. Now more than ever it is crucial that International Humanitarian Law and unrestricted access to those in need are upheld.”

In 2021, EU humanitarian aid will continue to provide food, nutrition and healthcare, financial assistance, water and sanitation, education and other lifesaving support to the conflict-displaced and those in severe need. The press release is available online.

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coronavirus

EU co-ordinating the urgent delivery of COVID-19 vaccines to Moldova

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A consignment of 21,600 doses of COVID-19 vaccines has been delivered to Moldova from Romania to support the country's response to the pandemic. This delivery follows Moldova's request for vaccines through the EU Civil Protection Mechanism, to which Romania has responded rapidly with this offer.

Crisis Management Commissioner Janez Lenarčič said: “I thank Romania for its generous and rapid offer to Moldova. The EU Civil Protection Mechanism continues to facilitate solidarity during the current pandemic. It is only through cooperation and mutual support, within the EU and also outside, that we can have an effective response to COVID-19. Supporting vaccination globally is essential for containing the COVID-19 pandemic: no country in the world will be safe until everyone is safe.”

Since the beginning of the pandemic, Moldova has already received a range of other offers co-ordinated through the Mechanism:

  • 8 million items including surgical masks, FFP3 masks, protective suits and gloves offered by  Romania;
  • 55 ventilators and 405,000 items of surgical masks, protective gloves and protective suits sent by Czechia;
  • almost 57,000 items of protective face shields and disinfectant liquid made available by Poland, and;
  • more than 6,000 items of examination gloves, hand disinfectant and blankets offered by Austria.

The EU Civil Protection Mechanism has co-ordinated and co-financed the delivery of over 15 million items of assistance to 30 countries to support their COVID-19 response, be it personal protective equipment, ventilators, the reinforcement of medical staff, or, more recently, vaccines. The first vaccine delivery under the mechanism was facilitated last week, when the Netherlands sent 38,610 doses of COVID-19 vaccines, together with other vaccination tools, such as syringes and needles, to the three Caribbean islands of Aruba, Curaçao and Sint-Maarten in response to their request for support.

In addition to the co-ordination of requests and offers made through the Mechanism, the EU also finances up to 75 % of the costs for transporting the assistance.

Background

The EU Civil Protection Mechanism is one of the tools that has been instrumental in providing support to countries requesting assistance during the coronavirus pandemic. Through the Mechanism, the EU is helping coordinate and finance the delivery of medical  and protective equipment and material across Europe and the world, to countries that seek assistance.

In addition, the EU's rescEU medical reserve and the Emergency Support Instrument (ESI) have provided additional key support to member states' health response to the pandemic.

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