Porsche 2010 Annual Report Download - page 44

Group management report
Enlargement of the executive board of
Porsche SE
At its meeting held on 13 October 2010, the
supervisory board of Porsche SE unanimously ap-
pointed Matthias Müller to the executive board of
Porsche SE (member with responsibility for general
technical product issues) with immediate effect. Mat-
thias Müller, who has been CEO of Porsche AG since
1 October 2010, succeeded Dr. Michael Macht on
Porsche SE’s executive board. The latter was ap-
pointed to the board of management of Volkswagen
AG effective as of 1 October 2010 where he is re-
sponsible for group production.
In addition to Matthias Müller, the other
members of Porsche SE’s executive board are Prof.
Dr. Martin Winterkorn (chairman), Hans Dieter Pötsch
(finance and controlling) and Thomas Edig (commer-
cial and administrative issues).
U.S. claims for damages dismissed as legally
insufficient at first instance
In 2010, a total of 46 plaintiffs filed a total of
six actions for damages against Porsche SE in the
United States District Court for the Southern District
of New York in the USA. The plaintiffs allege damages
of more than 2.5 billion US dollars. In three of the six
actions, the former members of the executive board
Dr. Wendelin Wiedeking and Holger P. Härter are also
named as defendants. Plaintiffs alleged in their com-
plaints that Porsche SE’s activities in connection with
its acquisition of a stake in Volkswagen AG during the
year 2008 constituted market manipulation and secu-
rities fraud in violation of the U.S. Securities Ex-
change Act and common law fraud. Porsche SE be-
lieves that the complaints are legally insufficient and
without merit, and has sought their dismissal. The U.S.
court dismissed all the complaints at first instance as
legally insufficient. All plaintiffs appealed this decision
in January 2011 (for further explanation, we refer to
the section “Litigation risk” in the risk report of Por-
sche SE in this management report).
Shareholders’ legal challenge fails
Two shareholders of Porsche SE who had
brought actions against the resolutions of the annual
general meeting on 30 January 2009 to have them
declared null and void failed on appeal. The lawsuits
were dismissed by the Regional Court of Stuttgart in
May 2010. The appeals against these rulings were
dismissed by the Higher Regional Court of Stuttgart in
a judgment of 17 November 2010. Leave to appeal
was denied. The plaintiffs then lodged an appeal
against the denial of leave to appeal.
Tax treatment of stock option transactions
In the course of stock option transactions re-
lating to various companies listed on the stock ex-
change, Porsche SE and Porsche AG also entered
into transactions that in the company’s opinion re-
sulted in tax-free profits and tax-deductible losses.
The tax authorities initially did not accept the opinion
held by Porsche SE. The company filed an appeal
against the tax authorities’ decisions. Upon request,
the tax authorities granted a stay of execution on the
subsequent tax payments until the final ruling on the
tax treatment was handed down.
The differences of opinion between the com-
pany and the tax authorities were resolved in Novem-
ber 2010. As a result, until the actual maturity date,
there will be a cash outflow of some 628 million euro
for tax and interest payments at the company, 357
million euro of which had been paid out by the report-
ing date. The provisions remaining after the payment
totaling approximately 717 million euro were released
to income but without affecting liquidity.
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