BERLIN, Oct. 24 (Xinhua) -- Porsche SE, the German holding company which owns the majority of voting rights in the publicly-listed Volkswagen Group, was ordered on Wednesday to pay investors around 50 million euros (56.98 million U.S. dollars) in compensation for its conduct in the "dieselgate" scandal.
Judge Fabian Reuschle of the Stuttgart Regional Court announced that Porsche SE was found to have acted in breach of its public disclosure duties with regards to emissions-cheating practices at Volkswagen during a class-action lawsuit. The former Volkswagen Chief Executive Officer (CEO) Martin Winterkorn, who simultaneously acted as the head of the Porsche SE management board, had at the very least demonstrated serious neglect in his role.
Reuschle followed the argumentation of plaintiffs that knowledge obtained by Winterkorn as Volkswagen CEO must have been available to Porsche SE as well. As a consequence, the holding company should have issued a profit warning to investors as early as May 2014 following first internal revelations about the installation of illicit motor software in diesel vehicles.
The law firm Nieding + Barth told press that it had secured damages worth 2.3 million euros (2.6 million U.S. dollars) for the pensions fund of the British city of Wolverhampton which it represented against Porsche SE. Other plaintiffs represented by the attorney Josef Broich were awarded a combined 44 million euros according to Broich's partnered law firm Tilp.
Notably, however, the verdict is not yet legally binding. Porsche SE has already criticized the ruling as unjustified and said it would file an appeal. The company argues that Winterkorn had a duty of confidentiality in his dual role at Volkswagen and the holding company and hence could not inform it about internal proceedings at the former.
The lawsuit in Stuttgart is only one of several ongoing compensation cases involving Porsche SE at the regional court. Although Porsche SE is headquartered nearby, it remains a matter of dispute whether such claims must actually be made in the framework of a larger so-called "template lawsuit" against Volkswagen which is currently being deliberated at the Braunschweig Higher Regional court rather than in individual lawsuits.
So-called "template lawsuits", in which several plaintiffs unite to press charges collectively and resolve key questions to set a legal precedent, were only recently enabled by new federal legislation passed in response to the ongoing "dieselgate" scandal. In closely-watched and still ongoing court proceedings of this category in Braunschweig, a group of investors are demanding billions of euros in compensation from the Volkswagen itself.
Porsche SE was first established by the engineer and automotive industry pioneer Ferdinand Porsche in 1931 who also founded the modern Volkswagen corporation. The holding company is owned to 50 percent by his descendants from the Porsche and Piech families who are widely considered to be amongst Europe's wealthiest with a combined net worth of approximately 39 billion euros. (1 euro =1.14 U.S. dollars)
