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Investor groups call for new probe of VW scandal

[FRANKFURT] Three investor groups called on Monday for a new, independent investigation into Volkswagen's emissions test-rigging scandal, saying the inquiries launched by the German carmaker so far may not be far-reaching or transparent enough.

German investors' association DSW and Deminor, a Brussels-based firm which represents investors including the city of New York pension fund, said shareholders should be allowed to vote on launching such an investigation at Volkswagen's (VW) annual general meeting (AGM) on June 22.

London-based Hermes EOS also called for an independent inquiry into the "potential liability of the members of the management and supervisory boards" of the German company.

VW declined to comment.

In September, Europe's largest carmaker admitted it had cheated diesel emissions tests in the United States.

It has created a Special Committee on Diesel Engines headed by Wolfgang Porsche, head of the family clan that controls VW, to investigate the scandal and hired law firm Jones Day to find those responsible.

But DSW said that wasn't enough. "When you have an independent investigation you can be sure that the findings will be publicised. With internal investigations you do not know whether everything has been made transparent," spokesman Juergen Kurz said.

Deminor said VW's internal probe was only looking for "serious and manifest breaches" by the management, which de facto reduced the review of board members' liability.

DSW mostly represents retail investors. Deminor declined to put a figure on the proportion of VW shareholders it represents. Hermes EOS advises investors with about 170 billion pounds (S$336.34 billion) in assets, but says its clients account for just 0.013 per cent of voting shares at VW.

Hermes EOS also urged VW investors not to ratify the actions of the management board at the AGM. Under German corporate governance rules, shareholders are asked to do this, though in VW's case the vote is likely to pass comfortably given the majority stake of the Piech-Porsche families.

VW has so far declined to comment in detail about the initial findings of its probe. But it has said there were no indications to date that current management was involved in the scandal.

The company, which has set aside 16.2 billion euros (S$25.3 billion) to cover vehicle refits and legal costs, has also said it is reorganising the processes and structures used for approving the software for engine control units with more clearly defined and binding responsibilities.

DSW acknowledged the chances of forcing an independent investigation were slim, given the Piech-Porsche families jointly control 52 per cent of VW voting rights and are unlikely to back the proposal.

If that happens, DSW could try to win a court order to enforce an independent investigation, DSW's Mr Kurz said.