The Arbitration Court of the Nizhny Novgorod Oblast decided to seize the assets of the German company Volkswagen in Russia as part of the demand of the Russian car manufacturer GAZ for the return of 15.6 billion rubles ($202 million).
The court accepted the lawsuit and captured the shares of the Russian representative headquarters of VW and the legal entities it holds. Moreover, the court banned the Federal Tax Service from performing any registration actions related to the liquidation, reorganization, change in the arrangement of participants, and raise or reduction in the authorized capital of VW Group Rus.
Russia filed a lawsuit on March 14, and the court made the decision on March 17. In March of last year, Volkswagen Group Rus left the production of cars at its plants in Kaluga and Nizhny Novgorod until further news. German media reported in October that Volkswagen sought an investor to purchase the factory. VW has consented to the sale of its assets in Russia.
The arbitration court decided to seize 28.06 percent of Volkswagen Aktiengesellschaft’s share in VW Group Rus, then 16.8 percent of Skoda Auto A.S.’s share in the same group, as well as a 55.14 percent stake in Volkswagen Finance Luxemburg S.A. In expansion, the court instructed the confiscation of several possessions of VW Group Rus, including production equipment.
The verdict of the GAZ car factory declared that Volkswagen Group intends to exit the Russian market soon, transferring their remaining assets to third parties, potentially causing the alienation of both their shares in the authorized capital of VW Group Rus and certain individual assets.
In the event of the sale of shares in the authorized capital of VW Group Rus, Volkswagen AG will not have any other property in Russia, making it impossible to enforce the court’s decision to compensate the plaintiff.