Search form

Last updated: 19 sec ago

You are here

Business & Economy

Ex-Porsche CEO charged with market manipulation

STUTTGART, Germany: German prosecutors have charged former Porsche SE Chief Executive Wendelin Wiedeking 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 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.
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 they are found guilty of breaching securities trading laws, a criminal offense, prosecutors have said in the past.
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 euros ($ 1,300) 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 AG to 75 percent of voting capital in the first quarter of 2009,” the prosecutor’s office said.
The defendants’ lawyers said Wiedeking’s and Haerter’s statements about Porsche’s plans for VW were “correct in content” and had not had any impact on VW’s share price.
“Without an impact on the share price there is no punishability,” they said in a statement.
The prosecutors expect a trial against Wiedeking and Haerter to begin in February or March. They said they have dropped a separate investigation into whether the two managers committed a breach of trust.
Wiedeking’s risky moves to take over Volkswagen backfired and pushed Porsche SE near bankruptcy.
Instead of taking over Volkswagen, Porsche ended up seeing its sports car business folded into the empire of Europe’s largest carmaker.

MORE FROM Business & Economy