Stuttgart public prosecutors end probe against former Porsche CEO Wiedeking

Article by Christian Andrei, on February 26, 2011

German media reported that the investigation by public prosecutors in Stuttgart into former Porsche CEO Wendelin Wiedeking has ended. Sueddeutsche Zeitung said that the charges will be dropped against Wiedeking and Porsche's former chief financial officer Holger Haerter for manipulating the Volkswagen share price during Porsche's failed takeover of VW.

However, Sueddeutsche Zeitung said that the authorities had initiated an investigation to determine if Wiedeking and Haerter breached fiduciary duty by participating in risky share deals.

Under Wiedeking’s leadership, Porsche quietly bought nearly all the freely traded ordinary shares of Volkswagen as part of a plan to take over the company. In October 2008, Porsche revealed its holdings and VW shares quickly went up. And for a brief period, the company was the world's biggest in terms of market value.

Porsche’s attempt to take over VW backfired as Porsche was saddled with debt, prompting a reverse takeover. VW's plans to absorb Porsche have been threatened by legal and tax issues.

According to Frankfurter Allgemeine Zeitung, the public prosecutors' office would make a statement on Thursday. The Stuttgart public prosecutors have yet to comment on this report.

Recently, a U.S. federal judge dismissed a lawsuit by 10 hedge fund groups who accused Porsche of cornering the market in shares of Volkswagen. The charges against Wiedeking and former Haerter were dismissed as well. [via autonews - sub. required]

Topics: porsche, ceo

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