Ex-Porsche CEO charged with rigging share prices

German prosecutors have brought charges of stock market manipulation against former Porsche chief Wendelin Wiedeking. The indictment comes after Wiedeking failed to take over car-making rival Volkswagen in 2009.

After three years of investigations, public prosecutors in Stuttgart, Germany, announced on Wednesday they will seek to prove that Wendelin Wiedeking and his Chief Financial Officer, Holger Härter, intentionally concealed information from stock market regulators about their intention to take over German carmaker Volkswagen (VW).

In 2008, the two Porsche executives used stock options bought with credits to covertly amass Volkswagen shares, causing prices to surge and short sellers to lose billions of euros. The hostile takeover eventually failed, leaving Porsche with massive debt of about 10 billion euros ($13 billion), and - ironically - seeking a bailout from rival VW itself in 2009.

Lawyers for the two defendants rejected the charges as unsubstantiated on Wednesday. They said the fact that prosecutors were forced to drop allegations of breach of trust already came close to an acquittal.

The court in Stuttgart now has to decide whether the evidence presented is enough to merit a trail.

In July this year, Volkswagen eventually took over Porsche, after the merger had repeatedly been postponed due to the risks of billions of euros in damages involved in the case.

uhe/mz (dpa, dapd)

Source: DW (19/12/2012): http://www.dw.de/ex-porsche-ceo-charged-with-rigging-share-prices/a-16465627