Porsche 2010 Annual Report Download - page 92

Group management report
Further risks relating to the basic agreement
and the associated corporate restructuring
As part of the basic agreement and the asso-
ciated agreements implementing it, Porsche SE en-
tered into a number of agreements with Volkswagen
AG and entities of the Porsche Zwischenholding GmbH
group. For further details, we refer to our disclosures
on related parties in note [29] of the consolidated
financial statements of Porsche SE as of 31 Decem-
ber 2010. The company’s executive board considers
the risk that the agreements made could have a sig-
nificant adverse effect on the net assets, financial
position and results of operations of the Porsche SE
group to be low.
Litigation risk
Porsche SE and the entities in which it holds
a direct or indirect investment are involved in legal
disputes and administrative proceedings both nation-
ally and internationally within the framework of their
operating activities. Where such risks are foreseeable,
appropriate provisions are created to cover any ensu-
ing losses. The company does not believe, therefore,
that these risks will have a sustained effect on the
economic position of the group. However, due to the
fact that some risks cannot be estimated, or only to a
limited degree, it cannot be ruled out that very seri-
ous losses may eventuate that are not covered by the
provisions already created.
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 – the Stuttgart public prose-
cutor has initiated investigations against the former
members of the executive board Dr. Wendelin
Wiedeking and Holger P. Härter in connection with
allegations of manipulating the market in Volkswagen
shares. According to the public prosecutor, the alle-
gations involve public statements made by represen-
tatives of Porsche SE and the failure to make certain
required statements regarding the acquisition of the
shareholding in Volkswagen AG between 2007 and
2009. In addition, the public prosecutor is investigat-
ing the two former members of the executive board in
connection with allegations of breach of fiduciary duty
to the detriment of Porsche SE. According to the
public prosecutor, there is reason to suspect that the
two former members of the executive board may have
taken risks jeopardizing the company’s ability to
continue as a going concern by entering into share
price hedging transactions in the course of acquiring
the shareholding in Volkswagen AG. Furthermore, the
public prosecutor has launched investigations against
Holger P. Härter and two employees of Porsche SE on
suspicion of obtaining credit by deception in connec-
tion with a loan that has already been repaid. The
investigations are not expected to be concluded
before the start of 2012.
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