Ex-Porsche CEO charged with market manipulation

Updated 20 December 2012
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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.


Britain’s M&S says must accelerate change or die

Updated 2 min 6 sec ago
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Britain’s M&S says must accelerate change or die

  • After taking account of adjusted items of 514.1 million pounds, including the charge relating to store closures, pretax profit was 66.8 million pounds, a 62 percent fall
  • M&S is one of the best known brands on British high streets

LONDON: Britain’s Marks & Spencer said on Wednesday it urgently had to modernize or risk fading away as it reported a second straight decline in annual profit and booked a 321 million pounds ($430 million) charge for a store closure program.
The 134-year-old M&S faces unrelenting competition from supermarkets, fashion chains like Zara, H&M and Primark, as well as online giant Amazon, while efforts to revitalize its business are being hampered by ongoing pressure on UK consumers’ spending power.
M&S reset its strategy in November, two months after retail veteran Archie Norman joined as chairman, detailing a five-year program of store closures and relocations, and moves to make its misfiring food business more competitive.
On Tuesday M&S said it would close 100 UK stores by 2022, further accelerating the plan as it strives to make at least a third of sales online.
M&S, one of the best known names in British retail, said it made a pretax profit before one-off items of 580.9 million pounds ($778.6 million) in the year to March 31.
That was ahead of analysts’ average forecast of 573 million pounds but down from 613.8 million pounds made in 2016-17.
After taking account of adjusted items of 514.1 million pounds, including the charge relating to store closures, pretax profit was 66.8 million pounds, a 62 percent fall.
Turnover was broadly flat at 10.7 billion pounds.
“We have to modernize our business to ensure we are competitive and reignite our culture. Accelerated change is the only option,” said M&S.
Shares in M&S have fallen 26 percent over the last year and the firm is in danger of being booted out of the prestigious FTSE 100 index.
The stock closed Tuesday at 292 pence, valuing the business at 4.7 billion pounds.