Porsche, Vw facing $2.3 billion claims for holding back information from shareholders

Article by Christian Andrei, on January 9, 2012

Porsche and Volkswagen are faced with numerous claims, totaling to around 1.8 billion euros ($2.3 billion), for supposedly holding back vital information from shareholders. The court said that one more lawsuit was filed against two German car companies, according to a spokeswoman for the court in Braunschweig, Germany. The extent of the damages weren’t divulged.

Porsche is accused of misleading investors about the number of shares in VW that it had at the time, resulting to a "short squeeze" that boosted VW shares. When Porsche announced that it controlled 74.1% of VW's voting stock in October 2008, the VW shares surpassed 1,000 euros apiece, with a more than a quadruple increase in a matter of days.

For a brief period, VW was the world's biggest company by market value. However, we all know that Porsche's attempt to take over its peer failed and backfired. Last year, Volkswagen had to delay a planned merger with Porsche Automobile Holding, the legal entity used in Porsche's takeover attempt of VW, in part due to the legal onslaught brought by investment funds. [source: Guardian]

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