German court clears former Porsche CEO over VW bid

Fri Mar 18, 2016 9:54am EDT
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By Irene Preisinger

STUTTGART, Germany (Reuters) - A German court has acquitted Wendelin Wiedeking, a former chief executive of Porsche (PSHG_p.DE: Quote), of alleged market manipulation in the course of one of the auto industry's most controversial takeover battles.

"I am extraordinarily overjoyed," Wiedeking, 63, told reporters after the ruling on Friday. "I have always said I am innocent."

In 2008, at the height of the financial crisis, the Stuttgart-based sportscarmaker moved to acquire more shares in its much larger relation, Volkswagen (VOWG_p.DE: Quote), buying shares and options before revealing that it had a stake of 42.6 percent as well as call options relating to a further 31.5 percent.

Because the options were due for cash settlement, not physical delivery of the shares, they were not subject to the same shareholding disclosure rules.

However, Wiedeking was subsequently accused of misleading the market about his intention to control Volkswagen as it only announced its intention to increase its direct stake to over 50 percent after disclosing the options position, which had sent VW's share price soaring to briefly make it the world's most valuable company.

State prosecutors had suspected Wiedeking and his former finance chief Holger Haerter of conducting a secret plan, whereby investors were misled and the share price manipulated.

Stuttgart regional court Judge Frank Maurer on Friday said the court was not convinced.

"The board had no secret plan," he said, adding that a conviction in the case would not have been "rationally justifiable".   Continued...

Former Chief Executive Officer of German luxury car company Porsche AG, Wendelin Wiedeking (C) leaves the court in Stuttgart, Germany March 18, 2016, after being aquitted of alleged market manipulation in the wake of one of the auto industry's most controversial takeover battles.   REUTERS/Michaela Rehle