Porsche 2012 Annual Report Download - page 221

[22] Litigation
Investigations of the Stuttgart public prosecutor
To the knowledge of Porsche SE – which is not a party to the investigations and therefore has
only limited knowledge of the subject matter and status of investigations – in December 2012,
the Stuttgart public prosecutor filed an action with the Chamber for Commercial Crimes of the
Regional Court of Stuttgart against former members of the executive board Dr. Wendelin
Wiedeking and Holger P. Härter in connection with allegations of information-based manipulation
of the market in Volkswagen shares.
According to the press release of the Stuttgart public prosecutor of 19 December 2012, they
are held responsible for false declarations made in public statements of the company at their
instigation in 2008 concerning the acquisition of the investment in Volkswagen AG. In five
statements made in the period from 10 March 2008 to 2 October 2008, Porsche SE is alleged to
have denied any intention to step up its investment to 75% despite already planning to do so at
the time. In its charges, the public prosecutor assumes that, by February 2008 at the latest, it
was already the intent of the accused former members of the executive board to increase Por-
sche SE's investment in Volkswagen AG to 75% of the voting capital before the end of the first
quarter of 2009 in preparation for a domination and profit and loss transfer agreement. The
Stuttgart public prosecutor alleges that in March 2008 the former members of the executive
board had effectively begun to increase the investment through the acquisition of corresponding
price hedging transactions relating to ordinary and preference shares in VW. Porsche SE's deni-
als are alleged to have had an actual impact on the stock market price of Volkswagen ordinary
shares. This is alleged to have led specific investors to sell Volkswagen ordinary shares that they
already held and to sell short Volkswagen ordinary shares.
As the Stuttgart public prosecutor had already announced in the aforementioned press re-
lease of 19 December 2012, the Stuttgart public prosecutor has dropped its investigations
against the two former members of the executive board Dr. Wiedeking and Mr. Härter in connec-
tion with allegations of breach of fiduciary duty.
The Stuttgart public prosecutor brought charges against three managers of the finance de-
partment of Porsche SE with the Chamber for Commercial Crimes of the Regional Court of
Stuttgart on suspicion of obtaining credit by deception. The main proceedings were opened by
decision of the Regional Court of Stuttgart dated 25 June 2012. The accusation is that one of
the banks involved during the negotiations for follow-up financing for the €10 billion loan due for
repayment in March 2009 was provided with false information on derivatives held by Porsche SE
relating to VW ordinary shares. The main proceedings began on 5 September 2012 and are still
ongoing. On 26 November 2012, the Regional Court announced in the public main proceedings
that the case against one of the accused would be dropped pursuant to Sec. 153a StPO
["Strafprozessordnung": German Code of Criminal Procedure].
Porsche SE considers the allegations made by the public prosecutor to be without merit.
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