South Korea's National Pension Service (NPS), the world's third-largest pension fund by assets, is to sue Volkswagen for damages in a German court over the automaker's emissions scandal. It attracts attention as it is the first movement made by a domestic institutional investor after a German regional court decided to allow investors to file a class action lawsuit against Volkswagen in August.
According to investment banking industry sources on September 29, the NPS recently showed its will to make a damage claim to the regional court in Braunschweig near Volkswagen’s Wolfsburg headquarters through its attorney, accusing the automaker of providing “incorrect information” to investors that sent its shares plunging. The NPS is now preparing a joint action with other foreign institutional investors which suffered from similar damages but the definite amount of its claim has not yet been made public.
However, the figure is estimated at more than 10 billion won (US$9.09 million) considering the fact that Volkswagen’s share price plunged by 50 percent after the emissions-fabricating scandal in September 2015 and has not revoked yet. The NPS held 26.7 billion won (US$24.26 million), or 0.04 percent, worth of preferred shares in Volkswagen as of the end of 2015. It is the 602nd largest in terms of amount among 2,898 overseas stock items invested by the company over the same period.
Previously, Norway's sovereign wealth fund, the fourth largest shareholder in Volkswagen Group, and California Public Employees' Retirement System (CalPers), the world’s fifth largest pension fund, already brought an action for damage against the car marker in Germany. Accordingly, the regional court in Braunschweig allowed investors to bring a class action in August. Like most European countries, Germany goes on a specific lawsuit as a representative, and its ruling is applied to the remaining lawsuits related to the issue.