Stuttgart prosecutors have raided the headquarters of luxury sports car maker Porsche as part of an insider trading investigation. Former Porsche chief Wendelin Wiedeking is also under investigation.
Dealings by Wiedeking and former Porsche chief financial officer Holger Haerter, both of whom resigned from their posts last month, are being examined by Germany’s financial supervisory authority (BaFin) on suspicion of market manipulation.
Part of the BaFin investigation will focus on recent fluctuations in share prices at competitor-cum-merger partner Volkswagen.
During the drawn-out merger negotiations between VW and Porsche, a collection of cash settlement options in VW shares earned Porsche billions as the stock climbed in value. The stock revaluation that resulted briefly made Porsche the world’s biggest company by market capitalization.
Until a few months ago Porsche was making more money from its financial dealings than from car sales at a time when carmakers around the world were suffering from a collapse in global auto markets.
Under Wiedeking, Porsche accumulated a 51-percent stake in its much larger rival VW, Europe’s largest carmaker, and wanted to take full control but the attempt failed and left Porsche squeezed under a huge debt pile.
Following a tip from BaFin, Stuttgart prosecutors launched a separate inquiry into Porsche with police seizing documents in their raid on Thursday.
Porsche has denied the allegations of market manipulation and said it would cooperate and assist investigators.
The automaker said it was also facing allegations of breaching information publication requirements as specified under the German Stock Corporation Act.