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German regulator BaFin drops Porsche disclosure probe
September 13, 2012 / 11:17 AM / 5 years ago

German regulator BaFin drops Porsche disclosure probe

FRANKFURT, Sept 13 (Reuters) - German markets regulator BaFin has dropped its investigation into whether Porsche SE violated disclosure rules when it informed shareholders in July about selling its sports car business to Volkswagen.

The move brings only partial relief to Porsche SE, however, as it is beset by legal woes that scuppered its holding company’s plans to combine with Volkswagen last year.

BaFin had investigated Porsche for market manipulation and passed on its findings to prosecutors in Stuttgart. The Stuttgart prosecutor is still working on a separate case about possible charges of market manipulation by Porsche’s former management.

Various lawsuits have also been filed against Porsche SE in Germany and the United States by hedge funds and have yet to conclude. German and U.S. investors accuse it of having concealed a move in 2008 to acquire VW and of covertly amassing a majority stake in Europe’s biggest carmaker.

BaFin on Thursday said it found nothing wrong with an regulatory filing issued by Porsche SE on July 4 of this year informing shareholders that VW would complete its two-step purchase of the Porsche AG sports car business.

At that time, Volkswagen bought the remaining 50.1 percent stake in Porsche AG which it did not already own for almost 4.5 billion euros ($5.8 billion), concluding years of efforts to combine the maker of the 911 sports car with the manufacturer of the VW Beetle.

Tax complications and investor lawsuits stopped Porsche SE from being merged into Volkswagen last year, leaving the holding’s owners stuck with the lawsuits and a company trading at a discount to the value of its VW stake.

Stuttgart prosecutors are looking at whether former Porsche SE Chief Executive Wendelin Wiedeking and his former finance chief manipulated markets over the way they disclosed late in 2008 their shareholding in Volkswagen.

Porsche racked up more than 10 billion euros in debt, forcing it to abandon efforts to buy VW and instead sell a 49.9 percent stake in Porsche AG to VW for 3.9 billion euros in December 2009.

Tax problems and shareholder lawsuits then held up VW’s move to buy the remainder through a share-swap with the holding company. ($1 = 0.7759 euros) (Reporting by Alexander Huebner and Edward Taylor; Editing by Hugh Lawson)

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