epa05636386 (FILE) A file picture dated 23 October 2015 shows a worker with a white glove touching a logo of the Phaeton luxury limosuine at the Volkwagen (VW) transparent factory in Dresden, Germany. According to news reports on 18 November 2016, Volkswagen plans to cut some 30,000 jobs worldwide, including about 23,000 in Germany alone. EPA/RALF HIRSCHBERGER
The emissions scandal has already cost VW around $27bn © EPA

The highest court in Lower Saxony has ruled to allow an independent expert to lead an investigation into whether Volkswagen’s top managers and directors played any role in the decade-long scheme to cheat emissions tests.

The appeals court in Germany has delivered the verdict in favour of DSW, the German shareholders’ association, which should help enable investors to get to the bottom of the Volkswagen diesel emissions scandal. VW shares fell 3.4 per cent in late trading after the verdict was issued.

“We will see who knew what, and when,” Ulrich Hocker, president of the DSW, told the Financial Times on Wednesday.

“This is an important step to get more clarity,” added Ingo Speich, portfolio manager at Union Investment.

“It’s also dangerous for Volkswagen because the finding of the court will get new information for further litigation. VW has been blocking it. This really helps get information to use against them.”

When Volkswagen admitted to cheating emissions tests in September 2015, leading to the resignation of its chief executive and more than $27bn in remedial costs and penalties, it hired the US law firm Jones Day to investigate what had happened.

Despite early promises to make those findings public, VW then said it would not release the report.

A variety of minority investor groups complained that the report would not be made public and also called into question the independence of the investigation.

At VW’s 2016 annual meeting, the group allowed shareholders to vote on whether an independent expert was needed. The proposal did not get enough votes, however. VW is nearly 90 per cent owned by the Porsche-Piech family, the State of Lower Saxony, and Qatar.

Minority shareholders reacted by taking the battle to court. In May 2016, Mr Hocker said it was “the only possibility to know what really happened,” as minority shareholders had “no chance” of standing up to the board.

Deminor, a consulting firm representing 14 institutional investors which has filed a similar case in Hannover, is still waiting for a verdict for its own case. “This is good news for all investors, absolutely,” Erik Bomans, a partner at the firm, said on Wednesday. “It will create pressure on the company.”

VW said after the ruling: “We note the decision of the Higher Regional Court of Celle. We consider the decision to be incorrect and will carefully review the written reasons to determine our next steps.”

One investor, speaking on the condition of anonymity, said VW’s board should have nothing to worry about. When Jones Day was doing its investigation it was reporting directly to the US Department of Justice, this person said.

“The idea . . . that DoJ would allow for Jones Day to be unthorough seems impossible,” this person added.

The independent expert to be appointed is Rüdiger Reinke, a partner at Baker Tilly, according to DSW. Mr Reinke was recommended by DSW and the court granted the request, Mr Hocker said.

“It’s a really big victory,” he added. “Mr Reinke must have access to every file.”

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