In a recent report by Reuters, a source suggested Lower Saxony, a shareholder in Volkswagen A.G., initially wanted to hold Volkswagen officials’ feet to the fire for the recent diesel emissions scandal that has cost the company billions.
However, the source said the German federal state relented so as not to add further damage to the company.
The Lower Saxony government owns 20% of the company and initially objected to the Volkswagen Board of Supervisors and its actions surrounding the cheating scandal. It wasn’t until Hans Dieter Poetsch, chairman of Volkswagen, pleaded with the government to stand down fearing a vote of no-confidence in the leadership, Reuters reported.
On May 10, the Board of Supervisors recommended shareholders approve the actions of management, including that of new CEO Matthias Mueller, at the annual general meeting on June 22.
Volkswagen has not issued a comment to the Reuters piece, however it has been reported the company had a $4.63 billion operating loss in 2015 and Volkswagen has reached a $10 billion settlement with the U.S. government, but several civil lawsuits are still in the fray.
The Reuters report indicated the objections from Lower Saxony – which has 2 seats on the 20-seat Board of Supervisors – were due to the fact that the investigation into the diesel emissions cheating were ongoing. Additionally, U.S. firm Jones Day is wrapping up work on a report commissioned by Volkswagen into the roles management may have had in the exhaust cheating issue.
Another source of ire, raised in the Reuters report, suggested members of the Lower Saxony delegation were upset over the agreement to pay 12 current and former Volkswagen execs nearly 63.2 million euros in bonus pay for 2015. The company’s annual report reflected that management had 30% of their bonuses withheld.