FRANKFURT: Volkswagen shares fell 3.8 percent on Wednesday as investors feared the carmaker would need to cut its dividend to help pay for a growing number of regulatory and judicial probes.
On Tuesday, a source told Reuters that the U.S. Justice Department sent Volkswagen a subpoena under a bank fraud law as part of investigations into VW's cheating diesel emissions tests. The law allows the government's civil division to investigate fraud over the last 10 years.
VW faces investigations around the world after it admittedin September to installing software in up to 11 million vehicles that allowed them to emit up to 40 times legally allowable pollution in real world driving.
DZ Bank analyst Michael Punzet said this, combined with news that prosecutors in Braunschweig had widened their probe to include a greater number of suspects, has spooked investors.
"Taken into account the possible higher financial burdens due to extended investigations could lead to a deeper dividend cut than currently expected by the market," Punzet said in a note on Wednesday reiterating his sell rating on the stock.
REUTERS
