Porsche SE’s shareholders were rumored to be planning to oust former Volkswagen Chairman Ferdinand Piech from the company’s supervisory board in a future meeting scheduled on May 30, raising questions on how his large share in the company will be handled. A list of candidates will be finalized during the scheduled meeting. While Hans Michel Piech, Ferdinand Piech’s brother, and Wolfgang Porsche are among the candidates, Ferdinand Piech name is nowhere to be found, the German national Sunday newspaper Bild am Sontagg cited.
Nevertheless, the shareholders may not even have to vote on whether to boot Piech off as he is in talks of selling his 14.7 percent stake in Porsche SE that amounts to nearly €1.1 billion (about $1.2B) in shares. This move could likely have a negative impact to the future of the automobile powerhouse’s business. Although it is said that Porsche and Piech families were discussing who will purchase the said shares, it is still not finalized if a deal will push through in the near future.
Both families are the major shareholders and they account for 52 percent of the Volkswagen’s common stock through Porsche Automobil Holding SE. Furthermore, the two families will be given a right to first refusal to purchase the very crucial share that represents almost 7.35 percent of the economic state in Volkswagen respectively. A close informant familiar with deliberations indicated that Piech could possibly sell to an outsider if they fail to reach an agreement.
The Piech and Porsche clans have been noted to have a long standing conflict ever since Wolfgang Porsche, cousin of Ferdinand Piech and the Chairman of the supervisory board of Porsche Automobil Holding SE tried to take over Volkswagen singlehandedly but to no avail. After VW swallowed Porsche, the Porsche clan automatically became the largest shareholders in German automotive industry. Also worth mentioning is a power showdown that happened between Piech and former VW Chief Executive Martin Winterkorn, which resulted in the former stepping down from his position.
The former Chairman got embroiled in an issue dubbed “Dieselgate” after allegedly informing top directors about potential deception of diesel emission testing six months before the scandal breaks out, prompting Volkswagen to take legal action.
This Volkswagen emission scandal, also known as the “emissiongate” or “dieselgate”, occurred in September 2015 when US Environmental Protection Agency found out that VW intentionally programmed turbocharged diesel engines to activate certain emissions only during supervised emission testing. The said vehicles emission passed the US standards during regulatory testing, but emitted 40 times more nitrogen oxide in daily driving. Jones Day, a law firm who conducted VW internal investigation, reported that Piech’s information had no evidence and that it was implausible, nonetheless.
If Ferdinand Pieche would push through with his plan on selling his stocks, it will mark the end of his dominance of automotive conglomerates. But in a positive note, the sale of Pieche’s shares could possibly help VW modernize its archaic governance fixture and give heavy weight to shareholders.