Calls for Chairman and CEO of VW to stand down
Union Invest, the third largest German asset manager and an influential shareholder of VW, has called for changes to  at both the VW supervisory and managerial boards. It argues that the company will need to hire external management to recover from this scandal, noting that the new CEO, Matthias Müller, is a near 40-year veteran in the group, and the new Chairman, Hans Dieter Pötsch, was previously the group's CFO. Meanwhile, VW has made provisions of €6.7bn against the recall costs of vehicles impacted so far, and puts the "economic risks" at a further €2bn.

The pressure on the chief executive of Volkswagen is growing after a leading investor in Germany called on Matthias Müller to step down less than two months after taking the helm at the scandal-hit carmaker.

Union Investment, the third largest asset manager in Germany, said VW needed to appoint a chairman and chief executive from outside the company in order to recover from the diesel emissions scandal.

Müller has worked for VW and the brands it owns for almost 40 years while Hans Dieter Pötsch, who was named chairman last month, was previously finance director for more than a decade.

Müller was appointed chief executive in September. He replaced Martin Winterkorn, who resigned days after VW admitted it had installed defeat devices in 11m diesel vehicles that allowed the manufacturer to cheat emissions tests.

The crisis has worsened since then, with Müller criticised for the lack of information about who was behind the scandal and the eventual cost to the company.

The US Environmental Protection Agency has accused VW of also installing defeat devices into sports cars, including a Porsche model, which the company denies. Last week VW added a further aspect to the scandal by admitting it had found “irregularities” in the carbon dioxide levels emitted by 800,000 of its cars, including petrol models.

Ingo Speich, a senior portfolio manager at Union Investment, told the Financial Times: “It would be far better to have new, fresh people in the management board and the supervisory board to gain back trust from the capital markets. It’s all about trust. From the capital market’s point of view the company is not communicating well and there is a lack of trust.

“We are disappointed by the personnel decisions VW took and the information they provided.”

Union Investments does not have the power to push out Müller on its own. The group owns just 0.5% of VW. But this still makes Union one of its top 15 shareholders and an influential voice in the debate about the future of the world’s second-largest carmaker.

VW is controlled by the Porsche and Piech family, who own 50.73% of the voting rights. The state of Lower Saxony owns a further 20%, while Qatar Holding has 17%. Just 12.3% of the shares are held by other institutions.

Invesco Perpetual, the British fund manager which owns a small stake in VW, also called on the carmaker to overhaul its culture, but gave its backing to Müller.

Stephen Anness and Andrew Hall, global equities managers atInvesco, said: “We think this corporate scandal could catalyse organisational change at a group that has historically demonstrated questionable corporate governance practices. Listening to the new CEO, Matthias Müller, present the Q3 results provided some early indications of potential change.

“Sometimes a crisis can be good for a company. With a new CEO, new CFO and two well-regarded external appointments to the management board, we see some chance of a healthy cultural change occurring.”

VW has hired US law firm Jones Day and auditors Deloitte to run an internal investigation into the scandal. It has given employees until 30 November to come forward with information about how the company cheated emissions tests, and guaranteed they would not be fired if they did so.

In a letter to employees, Herbert Diess, head of the Volkswagen brand, said this offer was being made in the interests of “full and swift clarification” of the scandal.

The carmaker has put aside €6.7bn (£4.7bn) to meet the cost of recalling the 11m vehicles, but it also faces the threat of fines and legal action from shareholders and customers. VW has said the economic risks of the CO2 discovery are €2bn. The sum is thought to relate to tax credits the company could be forced to repay in Europe if it is found that VW cars were emitting more CO2 than thought and should have therefore been liable for higher vehicle tax payments.