Ex-Porsche Executives Acquitted of Market Manipulation in Volkswagen Bid -- Update
18 Mars 2016 - 1:36PM
Dow Jones News
By Ilka Kopplin
STUTTGART, Germany--A court acquitted two former top executives
of Porsche SE, finding them not guilty of market manipulation
related to the company's botched 2008 takeover attempt of
Volkswagen AG.
The verdict could reduce potential financial risks for the
family that controls the German automotive group which itself faces
possible multibillion-dollar costs and penalties related to its
diesel-engine emissions scandal.
Prosecutors had alleged the Porsche executives--former Chief
Executive Wendelin Wiedeking and ex-Chief Financial Officer Holger
Härter--concealed their plans for months to gain control of
Volkswagen and then shifted strategy when the attempt went
awry.
The verdict of not guilty could serve as a precedent in several
civil cases pending against Porsche, where hedge funds are hoping
to recover billions of euros in losses related to the failed
takeover attempt which led to a dramatic spike in the value of
Volkswagen stock.
Judge Frank Maurer also ruled that Porsche doesn't have to pay a
fine.
Prosecutors had sought roughly EUR800 million ($869.5 million)
in penalties from Porsche and jail time for the two executives. The
prosecutors said they are considering an appeal, a move that would
take the case to federal court.
The high-profile trial, which is unrelated to Volkswagen's
emissions-cheating scandal, has shone the spotlight on the Porsche
and Piëch families that control Volkswagen's voting shares. The two
families, among Germany's richest, are the descendants of VW Beetle
creator Ferdinand Porsche.
The trial piqued public interest because longtime patriarch
Ferdinand Piëch chaired Volkswagen's supervisory board at the time
of the attempted takeover by Porsche. The families weren't accused
of wrongdoing in the case.
The role of Hans Dieter Pötsch, Chairman of Volkswagen has also
come under scrutiny. Mr. Pötsch was one of the architects of deal
which rescued Porsche from collapse in the aftermath of the
takeover attempt. It involved Volkswagen's acquisition of Porsche's
lucrative sports-car making business.
Mr. Pötsch's involvement has raised questions among some
investors about his suitability for steering Volkswagen through the
emissions scandal.
In October 2008, Porsche disclosed it held 42.6% of Volkswagen
shares and controlled another 31.5% through stock options. The
company also said it aimed to increase its stake to above 75% the
following year, having earlier denied it sought a stake of that
size, a crucial threshold for controlling a target company under
German law.
The disclosure shocked markets because investors who had bet
Volkswagen's stock price would fall suddenly realized there were
few shares left to close their bets. Volkswagen's share price
climbed above EUR1,000 the following week, briefly making it the
world's most valuable company.
Investors, many of them hedge funds, lost roughly EUR5 billion
in the so-called short squeeze. Some are now hoping to recoup their
losses through the courts.
Write to Ilka Kopplin at ilka.kopplin@wsj.com and Eyk Henning at
eyk.henning@wsj.com
(END) Dow Jones Newswires
March 18, 2016 08:21 ET (12:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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