Former Porsche chiefs cleared in court

Porsche’s former CEO and CFO have both been exonerated over charges that they illegally manipulated share-market prices as part of the sports car maker’s failed take-over attempt of the Volkswagen Group.

The result of the trial, which began in Stuttgart in October, will be a fillip for Porsche, which is battling several civil cases over the same claims.

The criminal and civil suits centred on the timing of statements, authorised for release by then-CEO Wendelin Wiedeking (pictured) and then-Chief Financial Officer Holger Haerter, during 2008.

The Presiding Judge, Frank Maurer, was scathingly dismissive in delivering his verdict in favour of the two executives. Weideking was facing 30 months in prison for a guilty verdict, while prosecutors had asked for 27 months for Haerter, plus fines of a €1 million from each of the former executives and €807 million for Porsche itself.

“There is nothing to the allegations, absolutely nothing,” Judge Maurer concluded.

“There was no secret plan to take over Volkswagen.

“From no viewpoint of the facts could we have rationally come to a conviction,” he asserted.

From March to October in 2008, Porsche denied five times that it had its sights set on taking over the Volkswagen Group, and then it released a statement on October 26 that it controlled 74.1 percent of Volkswagen Group shares.

The statement rocked speculators and institutional investors, forcing those who had sold Volkswagen short into a panic that sent Volkswagen shares soaring so high in their search for the few available shares to fulfill their obligations that it became the world’s most valuable company.

While many saw it as speculators getting their comeuppance, the hedge funds disagreed and heatedly promised revenge in the courts.

The takeover attempt fizzled out as the credit crunch of the 2008 financial crisis hit home, and Volkswagen ended up taking over a suddenly-exposed Porsche instead (in a deal masterminded by then Volkswagen Group Chairman and Porsche heir, Ferdinand Piech).

While Volkswagen owns Porsche’s automotive brand and assets, the Porsche family was left with the Porsche SE holding company, which is publicly traded in Germany with assets exclusively made up of Volkswagen Group stock.

Civil cases in Germany are asking for up to €5 billion in damages from Porsche (the Volkswagen Group’s side of Porsche).

Judge Maurer insisted German prosecutors had not correctly interpreted Porsche’s actions in 2008 and insisted that the facts backed up that no takeover move had been decided upon before October 26, 2008.

He pointed out that every witness who had worked with the two men insisted no decision was made before October 26, 2008.

“Is it possible that Wiedeking and Haerter were long determined to go for the takeover and the people working closest with them didn’t notice a thing?” Judge Maurer asked. “That would be like Julius Caesar going to war and nobody had a clue.

“Or do prosecutors think Wiedeking and Haerter staged a puppet theatre over months to have a defense ready for a possible criminal trial?” he said.

Besides the cleverness of their failed takeover bid, Wiedeking and Haerter will be remembered as the men who brought an ailing Porsche back from the brink with the big-selling Cayenne SUV, based on Volkswagen’s Touareg.