Ex-Porsche CFO Charged with Fraud

Ex-Porsche CFO Charged with Fraud
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Earlier this year, news broke that Volkswagen had plans to to do a full takeover of Porsche, which VW owned 49.9-percent of. But now the former CFO of Porsche, Holger Haerter, is one of three people being charged with fraud in Germany over Porsche’s intent to supposedly acquire VW.

According to investors, Porsche had denied throughout much of 2008 that it intended to purchase rival German automaker, Volkswagen. But in October, Porsche said that it controlled most of VW’s common stock, causing its shares to surge as short-sellers rushed to cover their positions. Porsche, of course, has denied the allegations.

The three are being charged with fraud over statements made when Porsche refinanced a $13.2-billion loan, understanding Porsche’s liquidity needs by over $1.8-billion if all purchase options Porsche held on Volkswagen had been exercised. In addition, it is reported that the managers withheld information about options tied to VW shares that Porsche had sold.

The portion of the probe that involves Wendelin Wiedeking and Holger Haerter manipulating the price of VW shares is still ongoing, and may not be resolved until the middle of this year. Last year, Stuttgart prosecutors stated that their probe against Wiedking and Harter had “solidified” suspicions that Porsche didn’t properly inform the market of their intentions to acquire VW between 2007-2009.

Porsche has been sued in the U.S. and Germany by short sellers of VW stock and other investors, claiming that Porsche secretly gathered up VW shares and ultimately caused the shareholders’ losses. There is a total of four suits pending out in Germany and the plaintiffs are seeking over $2.6-billion.

[Source: Automotive News]