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Porsche board under investigation

Feb 12 2013 14:11

Stuttgart - German prosecutors have extended a probe into market manipulation to all members of Porsche's supervisory board, including carmaker Volkswagen's chairperson, Ferdinand Piech.

Prosecutors are investigating the 12-member supervisory board of the German holding company, which owns about 51% of Volkswagen's (VW) shares, for suspected "aiding of market manipulation," a spokesperson said, declining to be more specific.

The move follows a decision by prosecutors last December to charge the former chief executive of Porsche, Wendelin Wiedeking, and his former finance chief, Holger Haerter, with market manipulation of VW shares during Porsche's botched 2008-09 takeover attempt of much larger VW.

Prosecutors in Stuttgart, where Porsche is based, have been investigating since 2009 whether the company misled investors in 2008 when it claimed it had no plan to acquire VW.

Porsche has repeatedly denied the allegations.

Some German and US investors say that throughout 2008 Porsche camouflaged its plans to buy VW and secretly piled up its holding.

In March 2008, Porsche dismissed as "speculation" talk that it intended to take over VW.

Seven months later, Porsche said it controlled 42.6% of VW's common shares and held options for another 31.5% of the stock it had not disclosed previously.

Porsche's statement caused VW shares to surge to €1 005 within days, briefly making VW the world's most valuable company as short-sellers raced to buy back stock they had borrowed to bet that VW shares would drop.

Porsche's attempts to buy VW backfired and pushed it to near bankruptcy. Instead of buying VW, the company ended up selling its sports car business, Porsche AG, to VW.

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