Porsche faces probe over stock price manipulation

Porsche faces probe over stock price manipulation

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Frankfurt:

German prosecutors said today that they have extended their probe into the suspected stock price manipulation at sports car maker Porsche. The investigation had now been widened to include "everyone who sat on the supervisory board of Porsche's holding company between March and October 2008, as well as a former employee," a spokesman for prosecutors said.

That means that Ferdinand Piech, supervisory board chief of Europe's biggest carmaker Volkswagen, Porsche supervisory board boss Wolfgang Porsche and works council head Uwe Hueck are now implicated in the probe.

The accused are being investigated on suspicion of "complicity to manipulate the market," the spokesman added.

In December, prosecutors charged Porsche's former chief executive Wendelin Wiedeking and former finance chief Holger Haerter with manipulating the Porsche's share price in connection with the - ultimately unsuccessful - attempt to take over Volkswagen.

Mr Wiedeking and Mr Haerter allegedly made false statements in public with regard to the Porsche's intentions in 2008. Both Mr Wiedeking and Mr Haerter denied the charges.

The prosecutors argue that Porsche issued at least five public statements between March and October 2008 publicly denying the plans, even though preparations for the takeover were already underway.

It was not until several months later that Porsche revealed in a surprise statement its takeover plans, sending the share price rocketing.

Porsche's bid to acquire the much-bigger Volkswagen eventually unravelled, leaving the luxury sports carmaker with more than $13 billion in debt.

The two companies then made a fresh attempt to tie the knot in 2009, with Volkswagen initially acquiring 49.9 per cent in Porsche in the first stage of the complex takeover agreement, the completion of which ran into a number of legal and tax hurdles.

Last year, a German court rejected two compensation claims brought against Porsche by the investors who felt duped by the company over the tie-up.

Copyright @ Thomson Reuters 2013

Story first published on: February 12, 2013 23:35 (IST)

Tags: Porsche, Volkswagen, Holger Haerter, Wolfgang Porsche, Frankfurt

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