VW's 'Dieselgate' account consistent with defense say analysts

Thu Mar 3, 2016 11:10am EST
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By Georgina Prodhan

FRANKFURT (Reuters) - Volkswagen's (VOWG_p.DE: Quote) statement that its former CEO may have overlooked warnings about problems with diesel emissions in the United States prompted at least one analyst to raise his target price on the stock on Thursday and lifted its shares.

A VW statement late on Wednesday did not contradict its previous position that no top managers were involved in cheating U.S. emissions tests, but it did say that Martin Winterkorn was alerted to irregularities as early as 2014.

"Whether and to which extent Mr. Winterkorn took notice of this memo at that time is not documented," VW said.

In its most detailed account yet of the events leading up to "Dieselgate", VW maintained, however, that Winterkorn did not know that "defeat devices" designed to cheat emissions-tests were involved until two weeks before the matter became public.

It argued it had not failed in its duty to inform shareholders of the looming problem because it had had no idea until the U.S. Environmental Protection Agency released its statement on Sept. 18 how expensive the affair could become.

Analyst Stuart Pearson at Exane BNP Paribas saw the statement as incrementally positive for VW's defense against claims from shareholders that it did not inform them of the looming problems in time, causing them massive losses.

Volkswagen shares have lost more than a third of their value since the scandal broke out on Sept. 18.

Pearson cut his estimate of VW's legal liability by 1 billion euros ($1.1 billion) to 10.7 billion euros and raised his target price by 2 euros to 138 euros, keeping his "outperform" rating.   Continued...

The logo of German carmaker Volkswagen is seen on a wheel at a showroom of Swiss car importer AMAG in Duebendorf, Switzerland February 12, 2016. REUTERS/Arnd Wiegmann