Saudi Arabia to issue quarterly budget update for the first time

Updated 03 May 2017

Saudi Arabia to issue quarterly budget update for the first time

RIYADH: Saudi Arabia said Tuesday that it will issue a quarterly budget progress report for the first time as part of efforts to boost transparency while diversifying its oil-dependent economy.
“We will for the first time in Saudi Arabia announce, possibly in a couple of weeks or less, the first quarterly results of the budget,” Finance Minister Mohammed Al-Jadaan told the Euromoney Saudi Arabia Conference.
Under its Vision 2030 plan released last year, the Kingdom aims to develop its industrial, investment and small-medium business base to employ more Saudis and reduce its reliance on oil revenue.
“The government made a clear commitment that it will increase the level of transparency,” Al-Jaadan said.
“They will submit to international laws on transparency” and respond to the needs of the private sector, which requires timely data to make investment decisions, he added.
The Vision 2030 plan coincided with a plunge in global oil prices that began in 2014 and left Saudi Arabia with a budget deficit for this year initially projected at $53 billion.
In September, authorities limited benefits for civil servants. But last month, King Salman restored those benefits.
Minister of State Mohammed Al-Asheikh later explained that the move coincided with “the substantially better-than-expected budgetary performance” in the first quarter after the government took measures to cope with its budget deficit.
In October Saudi Arabia raised $17.5 billion in its first international bond offering.
The Kingdom is also preparing to sell less than 5 percent shares of energy giant Saudi Aramco next year. In April, it cut taxes on oil companies in a major move that could attract investors.
Saudi Arabia’s stock exchange, Tadawul, has opened to foreign investors and in February began an alternative trading platform, Nomu, to boost small and medium firms.
Two more companies have been approved for offerings on Nomu in addition to the seven that already trade, Mohammed El-Kuwaiz, vice chairman of the Capital Market Authority (CMA), told the same conference.
“The first day of trading on the Nomu market was larger than most of the main markets in our Gulf Cooperation Council (GCC) countries, which gives you an indication of the pent-up demand,” he said.


New emissions blow for VW as German court backs damages claims

Updated 26 May 2020

New emissions blow for VW as German court backs damages claims

  • Scandal has already cost firm more than €30 billion; ruling serves as template for about 60,000 cases

KARLSRUHE, Germany: Volkswagen must pay compensation to owners of vehicles with rigged diesel engines in Germany, a court ruled on Monday, dealing a fresh blow to the automaker almost 5 years after its emissions scandal erupted.

The ruling by Germany’s highest court for civil disputes, which will allow owners to return vehicles for a partial refund of the purchase price, serves as a template for about 60,000 lawsuits that are still pending with lower German courts.

Volkswagen admitted in September 2015 to cheating in emissions tests on diesel engines, a scandal which has already cost it more than €30 billion ($33 billion) in regulatory fines and vehicle refits, mostly in the US.

US authorities banned the affected cars after the cheat software was discovered, triggering claims for compensation.

But in Europe vehicles remained on the roads, leading Volkswagen to argue compensation claims there were without merit. European authorities instead forced the company to update its engine control software and fined it for fraud and administrative lapses.

Volkswagen said on Monday it would work urgently with motorists on an agreement that would see them hold on to the vehicles for a one-off compensation payment.

It did not give an estimate of how much the ruling by the German federal court, the Bundesgerichtshof (BGH), might cost it.

Volkswagen shares were 0.5 percent lower. The BGH’s presiding judge had signaled earlier this month he saw grounds for compensation.

Costs mount

“The verdict by the BGH draws a final line. It creates clarity on the BGH’s views on the underlying questions in the diesel proceedings for most of the 60,000 cases still pending,” Volkswagen said.

A lower court in the city of Koblenz had previously ruled the owner of a VW Sharan minivan had suffered pre-meditated damage, entitling him to reimbursement minus a discount for the mileage the motorist had already
benefited from.

The court at the time said he should be awarded €25,600 for the used-car purchase he made for €31,500 in 2014.

“We have in principle confirmed the verdict from the Koblenz upper regional court,” said BGH presiding federal judge Stephan Seiters.

Volkswagen had petitioned for the ruling to be quashed altogether by the higher court, while the plaintiff had appealed to have the deduction removed.

A Volkswagen spokesman said that outside Germany, more than 100,000 claims for damages were still pending, of which 90,000 cases were in Britain.

The carmaker also said it had paid out a total of €750 million to more than 200,000 separate claimants in Germany who had opted against individual claims and instead joined a class action lawsuit brought by a German consumer group.

The carmaker said last month it would set aside a total of 830 million for that deal.

In a separate court, Volkswagen agreed last week to pay €9 million to end proceedings against its chairman and chief executive, who were accused of withholding market-moving information before the emissions scandal came to light.