German prosecutors have charged former Porsche chief executive Wendelin Wiedeking (right) and his former finance chief with market manipulation related to the purchase of Volkswagen shares.
The prosecutor’s office in Stuttgart, where Porsche is based, said yesterday the executives made false public statements during the sportscar maker’s botched 2008-09 takeover of VW. The defendants’ lawyers denied any wrongdoing by their clients.
Mr Wiedeking, hailed as “the man who outfoxed the market by Fortune magazine in January 2009, and Holger Haerter could face a sentence of up to five years if found guilty of breaching securities trading laws, a criminal offence.
Investors have said Porsche’s former top management had been pursuing plans to take over much larger carmaker VW while making public statements to the contrary.
In March 2008, Porsche dismissed as “speculation” media reports it intended to take over VW, which builds more cars in a week than Porsche does in a year. Seven months later Porsche disclosed it had options giving it control of almost three-quarters of VW, sending its shares higher and forcing short-sellers to race to buy back stock they had borrowed betting that VW shares would drop.
The historic short squeeze pushed VW shares above €1,000 each within days, briefly making the Wolfsburg, Germany-based carmaker the world’s most valuable company and triggering accusations of market manipulation.
“The investigation has shown that the defendants decided in February 2008 at the latest to increase Porsche’s holding in Volkswagen to 75 per cent of voting capital in the first quarter of 2009,” the prosecutor’s office said yesterday.
The defendants’ lawyers said Mr Wiedeking’s and Mr Haerter’s statements about Porsche’s plans for VW were “correct in content” and had not had any impact on VW’s share price. – (Reuters)