FRANKFURT—Prosecutors said on Friday that they have dropped an
investigation into Porsche Automobil Holding SE's former
supervisory board on allegations of market manipulation during its
failed attempt to take over Volkswagen AG in 2008.
Porsche SE was set up in 2007 to hold the operating subsidiary
of Porsche Group, the sports-car maker Porsche AG. When Porsche
SE's takeover bid for Volkswagen failed in 2008, Porsche AG ended
up in 100% ownership of Volkswagen. Porsche SE isn't involved in
car making. It is owned by the Porsche and Piech families and holds
a stake in Volkswagen.
Stuttgart prosecutors had been looking into allegations that
Porsche SE's 12-member supervisory board aided and abetted
manipulation of the capital markets by not disclosing its true
intentions when Porsche SE tried to take over the much-larger
Volkswagen in a debt-financed maneuver. The move failed when credit
markets dried up during the financial crisis, triggering the
departure of the Porsche's top management.
A spokeswoman for the Stuttgart prosecutors confirmed that the
office has dropped the investigation. She declined to elaborate
further.
Several hedge funds have claimed that they suffered substantial
losses and have sued Porsche SE for allegedly cornering the market
in Volkswagen stock in 2008. By ending the probe, the public
prosecutors prove that the allegations are "without merit," Porsche
SE said.
Separately, Porsche's former chief executive, Wendelin
Wiedeking, and former finance chief, Holger Hä rter, are to stand
trial in Stuttgart in October.
"We welcome the public prosecutor's decision and are optimistic
that the allegation of market manipulation against the former
members of the executive board will also prove to be without merit
in the pending main hearing," said Porsche SE supervisory board
Chairman Wolfgang Porsche, referring to the October trial.
Ilka Kopplin contributed to this article.
Write to Ulrike Dauer at ulrike.dauer@wsj.com
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