The former CFO of Porsche SE, the holding company once responsible for sports car manufacturer Porsche and now a majority owner of Volkswagen, has been convicted of credit fraud by a court in Porsche’s home town of Stuttgart, Germany.
The former CFO, Holger Haerter, was found guilty of making incomplete and misleading statements about the value of Volkswagen share derivatives held by Porsche SE back in 2009, when the company was attempting to secure a multi-billion dollar loan from French bank BNP Paribas in order to take over Volkswagen.
According to Reuters, he was fined €630,000 (approximately $824,000) for the offence, despite BNP representatives claiming during the case that they never felt misled. Haerter, understandably, plans to appeal.
It all started in 2007 when Porsche SE started increasing its ownership in Volkswagen. By 2009 Porsche SE’s stake had increased to 50.76 per cent and the new loans were needed to finalise the takeover.
Unfortunately for Porsche SE, German state laws and its own mounting debts (which it used to finance the original purchase of the Volkswagen shares) ultimately forced it to turn to Volkswagen itself for help, leading to Volkswagen’s own purchase of shares in Porsche the sports car manufacturer from Porsche SE.
This separate deal was finalised only last year with Volkswagen now fully owning Porsche the sports car manufacturer. Porsche SE, meanwhile, was able to retain its 50.76 per cent stake in Volkswagen.
The failed takeover attempt not only cost then Porsche CEO Wendelin Wiedeking his job, but it also cost investors of the parties involved billions once it became known. A group of investment fund managers are still attempting to recover some of the lost funds, estimated to be as much as $2.6 billion.