Connect with us

Markets

VW Faces $11b Investor Suit Over Diesel Scandal

Published

on

volkswagen
  • VW Faces $11b Investor Suit Over Diesel Scandal

Volkswagen faces a trial this week as investors seek 9.2 billion euros ($10.7 billion) in compensation, arguing that the automaker should have informed shareholders about a diesel pollution scandal before regulators did in September 2015.

The lawsuit bundles 1,670 claims brought mainly by VW’s institutional shareholders who have accused the company of failing to inform investors about the scope of a scandal which has cost the company 27.4 billion euros in penalties and fines.

Had VW warned investors about the size of the scandal before the U.S. Environmental Protection Agency (EPA) issued a “notice of violation” on September 18, 2015 then institutional investors may have avoided losses on their shareholdings, plaintiffs said.

VW shares lost up to 37 percent of their value in the days after authorities exposed illegal levels of pollution emitted from VW diesel cars.

Volkswagen has admitted systematic emissions cheating but denies wrongdoing in matters of regulatory disclosure.

Presiding Judge Christian Jaede at the higher regional court in Brunswick, Germany, near VW’s headquarters, will make opening remarks at the trial on today.

VW insists that the U.S. EPA’s issuance of the notice of violation was not in keeping with how U.S. authorities had handled similar cases involving other carmakers.

Because other carmakers had reached a settlement for emissions cheating without an EPA notice of violation, and because VW was in talks about reaching a settlement, VW’s board did not see the need to inform investors, the carmaker said in a filing with the court.

VW had already made substantial provisions in late 2015 to cover other vehicle recalls, and because previous fines by U.S. authorities for similar violations were below $200 million, there was no need to issue an ad-hoc disclosure notice under German law, the carmaker said in the filing.

Volkswagen said board members at the time, including Volkswagen’s Chief Executive Officer Herbert Diess and Chairman Hans Dieter Poetsch, therefore, did not violate disclosure rules, according to the VW defence document filed with the court.

“Neither the management board nor individual board members caused or were involved with the compliance violation in the United States,” VW’s court filing said.

However, plaintiffs, including lawyer Andreas Tilp from law firm TILP and fund management firm Deka, argue that managers below management board level, including divisional heads, knew about deliberate and systematic emissions cheating.

The company as such was therefore aware of severe criminal activity and investors should therefore have been warned earlier, the plaintiffs said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Gold

Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin

Published

on

Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.

 

Continue Reading

Crude Oil

Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting

Published

on

oil

Oil Prices Rise to $64.32 Amid Expected Output Extension

Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.

Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.

“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.

Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.

“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.

Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.

Continue Reading

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Published

on

Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

Continue Reading

Trending