Blackrock to sue VW over emissions scandal

Asset manager Blackrock and a group of institutional shareholders are to sue car maker Volkswagen for €2bn (£1.7bn) over its emissions scandal.

Investors, including sovereign wealth funds and pension funds, are expected to file a complaint in a court in Braunschweig, Germany, on Friday.

They are to claim that VW failed to disclose its use of software defeat devices on diesel cars in a timely way.

VW has faced a flood of legal actions over the scandal.

In September 2015 the US Environmental Protection Agency found that many diesel VW cars had a software "defeat device" that could detect emissions testing and change how the car performed to improve the test results.

The shareholder claims relate to the drop in Volkswagen's share price after the scandal broke.

Between September and October 2015, Volkswagen AG preference shares lost about 45% of their value, and are still about 28% down.

Blackrock, one of the world's largest asset managers, said: "On behalf of their investors, a number of Blackrock-managed collective investment schemes are pursuing, alongside other institutional investors, legal action against Volkswagen AG in connection with Volkswagen's failure to disclose to investors its use of 'defeat devices' that manipulated emission tests.

"In light of the ongoing legal proceedings we cannot comment further on the matter at this point."

Norway's Oil Fund, which is the world's largest sovereign wealth fund, the California State Teachers' Retirement System, the Greater Manchester Pension Fund, and State Street are part of the action against VW.

The complaint will be filed by law firm Quinn Emanuel.

The case is being funded by Bentham Europe, which is also backing a complaint brought in June by institutional investors.

In May Volkswagen more than doubled its provisions for the diesel emissions scandal to €16.2bn (£12.6bn). In the same month Norway's sovereign wealth fund said it was planning legal action against VW.

In June, VW agreed to pay $10.2bn (£6.9bn) to settle some of its US claims, and in September Australia launched legal action against the car maker.