STUTTGART, Germany (Reuters) - A German court has acquitted Wendelin Wiedeking, a former chief executive of Porsche PSHG_p.DE, 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), 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”.
The prosecutors had sought a 30-month custodial sentence and a fine of 1 million euros ($1.1 million) for Wiedeking and a lesser penalty for Haerter, who was also acquitted on Friday. Prosecutors had also demanded a fine of more than 800 million euros for Porsche SE, VW’s majority shareholder.
Prosecutors have until March 29 to consider an appeal, after the court rejected their arguments point-by-point in its ruling.
Porsche executives had maintained they had not sought as early on in 2008 as had been alleged, to take outright control of VW, which would have required a stake of 75 percent.
“Porsche decided on March 3, 2008, to acquire the majority of voting shares in VW. There was no intention at that time for Porsche to raise its stake to 75 percent of the votes,” Porsche had said in a statement.
Porsche was forced to abandon the takeover campaign in 2009 as the financial crisis caused creditors to close in on its mounting debts, forcing it ultimately to seek a rescue from VW, which subsequently bought Porsche’s core carmaking business from the holding company, Porsche SE.
Porsche SE welcomed the court’s decision on Friday, saying the ruling backed its position in pending civil suits related to the case.
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Additional reporting by Ilona Wissenbach; Writing by Jonathan Gould and Edward Taylor; Editing by Christoph Steitz, Greg Mahlich