Stockholm, DusseldorfThe world’s largest oil fund out Norway has his stake in Volkswagen halved last year. As from the list published on Wednesday about all holdings of the world largest sovereign wealth fund shows this end of 2017 VWShares valued at eleven billion kroner (1.1 billion euros).
At the end of last year, there were only shares worth 5.2 billion kroner (534 million euros). The Fund did not comment on the background to the sale of VW shares.
VW spoke of “normal shifts”. The smoldering conflict between Volkswagen and the oil fund as the largest independent VW shareholder has been the decisive factor in reducing the share from 1.3 percent at the end of 2017 to 0.8 percent at the end of last year. After the revelations about the manipulation of diesel engines by VW, the fund exercised unusually sharp criticism of the group’s management structure.
Yngve Slyngstad, head of the oil fund, described the management structure related to the exhaust foul on the Financial Times as “complex and problematic” in 2016. It had spoken with VW, but gained the impression that the group does not take the concerns of investors seriously. “You obviously do not listen,” Slyngstad told the newspaper.
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Lengthy procedure
Shortly thereafter, the Fund filed a lawsuit against VW with other institutional investors. The plaintiffs accuse VW of being late about the diesel scandal to have informed. The shareholders are deceived, because the car maker issued an ad-hoc announcement on September 22, 2015.
Already on September 18, the US Environmental Protection Agency (EPA) had published the scandal in the so-called “Notice of Violation”, on the following days the price of the VW share crashed by about 40 percent. In a short time the market capitalization of the group shrank by more than 20 billion euros. The plaintiffs argue that they had not bought VW shares had they been aware of the manipulation.
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Within the group, it had already been clear years before that illegal methods were used in the purification of exhaust gases. The proceedings started in the fall of 2018 before the Higher Regional Court of Braunschweig. VW rejects the claims and has set out its point of view in a roughly 700-page written statement. No one at VW thought of billions of dollars of damage that would have required an ad-hoc release.
When the procedure comes to a conclusion is hardly foreseeable. Before the Higher Regional Court it will continue on 25 March. There are still many negotiating days scheduled. With a judgment, the case is unlikely to be completed.
The Norwegian Oil Fund, which was founded in 1996 to safeguard the welfare state, even after the gas and oil wells dried up, owns 1.4 percent of all shares issued worldwide. The administrative capital is currently around 900 billion euros.
Its holdings in more than 9000 companies are constantly fluctuating. However, the participation in VW has never been so low as now.
The oil fund is subject to the strict requirements of the Norwegian government in its investments in equities, bonds and real estate. For example, it called for all interests in the arms and tobacco industry to be scrapped. Even corruption allegations against a company can lead to the exit of the fund.
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