×

Volkswagen says did not violate capital market disclosure rules

Volkswagen has not violated disclosure rules, management board member Christine Hohmann-Dennhardt told shareholders on Wednesday, as regulators probe whether the company disclosed emissions test cheating in a timely manner.

"VW remains convinced that it met capital markets obligations," Hohmann-Dennhardt told the annual general meeting in Hanover, Germany on Wednesday.

The prosecutors in Braunschweig, near VW's Wolfsburg headquarters, said on Monday they were investigating former VW CEO Martin Winterkorn and a second unidentified executive over whether they effectively manipulated markets by delaying the release of information about the firm's emissions test cheating.

VW and U.S. regulators were in talks for months about the carmaker's emissions tests, but it was not until Sept. 18 that the cheating was announced to financial markets.

'Radical overhaul' needed

Global investment adviser Hermes EOS called on Wednesday for shareholders to vote against the discharge of the management and the supervisory board at today's AGM.

In a note published ahead of the meeting, Dr Hans-Christoph Hirt, co-head of Hermes EOS said that the advisory firm had "initiated a request for a special audit to investigate the acts and potential breaches of duty by the two boards."

It also recommended its clients "vote against the election of the candidates proposed for election or re-election to the supervisory board, but support the only independent non-executive director among its members."

Hirt said that Hermes had a decade of engagement with VW and it had focused its concerns on the underlying corporate governance issues at Volkswagen, "not least the influence of its principal shareholders and the composition and effectiveness of the supervisory board."

"The company's continuous disregard of fundamental corporate governance principles may have contributed to the emissions scandal. It has undoubtedly tarnished the reputation of the German two-tier board system and employee representation among foreign institutional investors, resulting in collateral damage to the German economy," Hirt said.

He concluded that "a radical overhaul of corporate governance and culture is required before the company can sustainably create value for investors and other key stakeholders."

Follow CNBC International on Twitter and Facebook.