Posted on 08/22/2009 5:21:38 AM PDT by xsrdx
Porsche heaquarters was raided by German investigators Thursday due to suspicions of insider trading by former CEO Wendelin Wiedeking, who was ousted last month following an epic takeover battle in which the luxury carmaker almost swallowed Volkswagen─Europe's largest carmaker, which is more than 10 times Porsche's size─before VW turned the tables. It is now set to gobble up Porsche instead.
In trying to buy up Volkswagen, Wiedeking had accumulated 43 percent of VW's shares but secretly held options on another 32 percent. Porsche did not disclose the options until October 2008, roiling the markets. The company said yesterday that the trades were perfectly legal under German law.
Under Wiedeking, Porsche turned itself into something like a hedge fund that happened to make fast cars. In the first half of the company's accounting year that ended March 31, Porsche reported $9.5 billion in profits from trading Volkswagen shares, versus the $700 million it earned by selling $4.2 billion worth of cars.
In trying to buy up VW, Wiedeking made a risky bet that ignored the wiles of Germany's politicians, who guaranteed Volkswagen's independence with a special law against a takeover, limiting each shareholder's voting rights to 20 percent no matter how many shares he accumulates. The European Union has long declared the "Volkswagen Law" illegal but German Chancellor Angela Merkel supported a clever rewriting of the law that nominally met EU objections but kept the limits on outside shareholders intact.
(Excerpt) Read more at blog.newsweek.com ...
I hope the resale value of my seven Porsche’s are not affected by this.
Not much, since there is historically a lot of closely linked history between Porsche and Volkswagen. Indeed, the first true Porsche sports car, the 356, essentially was a highly-modified Volkswagen Beetle!
In trying to buy up VW, Wiedeking made a risky bet that ignored the wiles of Germany's politicians, who guaranteed Volkswagen's independence with a special law against a takeover, limiting each shareholder's voting rights to 20 percent no matter how many shares he accumulates. The European Union has long declared the "Volkswagen Law" illegal but German Chancellor Angela Merkel supported a clever rewriting of the law that nominally met EU objections but kept the limits on outside shareholders intact.Seems like Wiedeking would have known that.
Not to worry. Of the 14 I’ve owned, not one of them was
worth less when I sold it than when I bought it. The two I
have now have almost doubled in price.
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