Volkswagen Lawsuit

[Anchor Lead]

The Korean government and the Bank of Korea have filed a lawsuit against Volkswagen. The plaintiffs sued the German carmaker for not properly informing shareholders about their fabricated gas emission tests and causing large losses for investors.

[Pkg]

The Korea Investment Corporation has filed a damage compensation suit against Germany's Volkswagen on behalf of the Korean government and the Bank of Korea. The KIC accused Volkswagen of causing financial damage by failing to properly inform investors of the fact that the automaker had fabricated its emissions test results. Since the U.S. government announced the German carmaker's emissions scandal last September, Volkswagen stock has fallen sharply, bringing major losses to investors. The KIC also suffered losses when it invested in Volkswagen the foreign money consigned to it by the Ministry of Strategy and Finance and the Bank of Korea. Therefore, the plaintiffs of this lawsuit are the Korean government and the Bank of Korea. This is the first time that the Korean government has sued a foreign corporation for compensations for shareholder damages. The regional court in Braunshweig, Germany has seen some 1,400 actions brought against Volkswagen by institutional and individual investors worldwide. The lawsuits amount to a combined total of more than 9 billion dollars. The German court will rule on a specific lawsuit as a representative case and apply its conclusions to the remaining cases related to the issue. The damage compensation amount due to the Korean government will be determined as early as the end of this year.