By Andreas Cremer
HANOVER, Germany (Reuters) - Volkswagen's <VOWG_p.DE> top shareholders closed ranks behind management on Wednesday, defying a torrent of criticism from smaller investors about the German carmaker's emissions test cheating and its response to the scandal.
Europe's largest automaker held its first annual shareholder meeting since admitting in September to rigging U.S. diesel emissions tests in a scandal that risks costing it tens of billions of dollars.
The crisis has led to calls from some investors for greater openness at a business that is almost 90 percent controlled by its founding Porsche-Piech families, its home region of Lower Saxony and the Gulf state of Qatar.
But there was little sign on Wednesday of a change in corporate governance, with key shareholders easily defeating two motions aimed at replacing Hans Dieter Poetsch - Volkswagen's chairman and also head of the Porsche-Piech family's holding company - as chair of the meeting.
Poetsch, who is also VW's former finance chief, repeated an apology to investors.
"We sincerely regret that the diesel issue is casting a shadow on this great company," he told the meeting of about 3,000 shareholders in Hanover.
But some investors were not mollified.
"We are looking at a shambles," said Ulrich Hocker of Germany's DSW association of private investors, citing "collective failure" by top executives for the scandal.
"The stock has plunged 50 percent, market share keeps shrinking and diesel engines which long have been portrayed as the savior are just a big bluff," Hocker said.
Chief Executive Matthias Mueller sought to assuage investors by stressing VW's readiness to change, noting the efficiency drive it has announced to fund an increase in spending on electric vehicles and services such as ride-hailing and car-sharing.
Alexander Scholl of investment firm Deka was not convinced.
"It sounds appealing to aim to become the leader on electric mobility, but the actual plans behind this are shallow," he said at the meeting, which finished late on Wednesday.
ACRIMONIOUS DEBATE
Prosecutors in Braunschweig near VW's Wolfsburg headquarters are investigating former VW CEO Martin Winterkorn and VW brand chief Herbert Diess over whether they effectively manipulated markets by delaying the release of information about the emissions test cheating.
A person familiar with the matter told Reuters on Tuesday that German financial watchdog Bafin had asked prosecutors to investigate VW's entire management board at the time the crisis erupted, arguing it was collectively responsible.