State pension fund takes hit on scandal-hit VW stake
The National Pensions Reserve Fund, which manages assets to cover future pension needs of State employees, is a shareholder in the German car group Volkswagen - which slumped in value last week, following revelations that the company had fiddled its emissions tests to beat regulations.
Shares in Volkswagen have fallen by 60pc over the last week. The NPRF held 24,450 shares in Volkswagen at the end of last year, according to its most recent annual report. Those shares were valued at €4.5m.
However, last week's share price collapse means the taxpayer's stake is now worth just €2.6m, having shed €1.9m since the start of the year.
The State pension fund also holds Volkswagen corporate bonds, which it valued at €4.9m at the end of last year. It held over two million Volkswagen leasing bonds due in 2023 with a 1.125pc coupon. These were valued at €2.11m by the State bond last year.
It also held 2.5 million Volkswagen long-dated variable-rate corporate bonds due for redemption in 2049. These were valued at almost €2.8m at the end of last year.
Last Sunday, Volkswagen lurched into the biggest crisis of its 78-year history after US regulators found that its software for diesel cars gave false emissions data.
CEO Martin Winterkorn resigned after apologising for the scandal.
The US Environmental Protection Agency (EPA) said last week that the software deceived regulators measuring toxic emissions and that Volkswagen could face fines of up to $18bn (€15.9bn) as a result.
The EPA said that the cars in question "contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test".
The feature, which the EPA called a 'defeat device', masks the true emissions only during testing.
When the cars are on the road, they emit as much as 40 times the level of pollutants allowed under clean-air rules meant to ensure public health is protected, she added. Up to 80,000 cars in Ireland may have been affected by the emissions-rigging scandal.
Sunday Indo Business