Hermes, the activist British fund manager, has written to directors of Volkswagen to demand an investigation of the agreement between the carmaker’s two biggest shareholders.
The letter warns that Hermes could “share our concerns with other shareholders” at the annual meeting next week.
The move reflects increased anxiety among shareholders of the German carmaker about the influence of Ferdinand Piëch, its chairman, Porsche, the carmaker he partly controls, and Lower Saxony, the state where VW is based. Porsche became VW’s biggest shareholder last year. Lower Saxony is its second biggest. Together they own more than 40 per cent of the shares.
The letter to all 10 shareholder representatives sets the scene for a stormy AGM next week.
DWS and Deka, two of Germany’s biggest funds, have tabled motions criticising Mr Piëch. Several large shareholders plan to express their dismay at the way he has interfered in the running of the company.
Hermes declined to comment. The letter, seen by the FT, raises a list of concerns about Mr Piëch, Porsche and Lower Saxony. “It is a clear sign the proper communication channels don’t work,” said one large shareholder.
The letter calls on independent directors to investigate the agreement between Porsche and Lower Saxony that led to the appointment of Porsche’s chief executive and, soon, its finance director, to the VW board. It will also lead to Mr Piëch’s replacement by a neutral chairman.
Hermes is concerned the agreement could be a “concert party”.
If evidence of an agreement emerges, “the consequences for the shareholders ... could be rather dramatic, including a loss of voting and dividend rights or the requirement to launch a takeover bid”, the letter says.
However, both parties deny they technically acted in concert.