The United States and Volkswagen are closing in on a $10 billion settlement over the German car company's diesel emissions cheat. But the carmaker is far from out of the woods when it comes to closing the door on the scandal, and a powerful new player now has VW in its crosshairs.
On Sunday, Norway's $850 billion state pension fund, which is the largest sovereign wealth fund in the world, announced it would join a class action lawsuit brought against the company by private investors in Germany, who are looking to make up some of their losses on their VW investment. Before the cheat emerged last September, the fund, known as the Norges Bank Investment Management, had a $1.2 billion stake in the company. It's the fourth largest stakeholder in VW.
That investment is now worth $720 million, and the fund wants a court to force VW to make up at least some of the $500 million loss. Volkswagen's stock price has plummeted as much as 40 per cent since the news of the scandal broke.
"We have been advised by our lawyers that the company's conduct gives rise to legal claims under German law. As an investor, it is our responsibility to safeguard the fund's holding in Volkswagen," Marthe Skaar, the fund's spokesperson, said in a statement Sunday.
VW has set aside $18 billion to pay for the emissions cheat, which involves 11 million cars around the world. The deal with the US, on course to be finalized in June, is expected to cost the company around $10 billion.
Whether or not the remaining $8 billion would be enough to cover the roughly 70 lawsuits that have now been filed against the automaker remains unclear.
VW has admitted wrongdoing that allowed its diesel cars to emit almost 40 times the permitted levels of nitrogen oxides in the United States. It has also acknowledged it might have to pony up much more cash than it originally anticipated. The company did not respond to requests for comment on the latest development.