BERLIN (Bloomberg) -- Former Porsche SE CEO Wendelin Wiedeking must stand trial over the company's failed bid to use options to acquire Volkswagen AG, a Stuttgart appeals court ruled.
The ruling overturned a decision by a lower court in April that said there wasn't enough evidence to pursue the case, Stefan Schueler, spokesman for the appeals tribunal, said in a statement today.
Ex-Chief Financial Officer Holger Haerter must also stand trial.
Porsche has faced a series of investigations and lawsuits since disclosing in October 2008 that it had access to 74.1 percent of Volkswagen, partly through cash-settled options, and was seeking to acquire 75 percent as part of a takeover strategy. The announcement caused Volkswagen's stock to jump as short sellers raced to buy shares to repay borrowed stock in bets that VW would fall.
The appeals court judges "list numerous indications that could suggest that there was a hidden decision to increase the stake as they could suggest the opposite evaluation by the lower court," said Schueler. "Because evidence rules are a highly sensitive issue, the case has to go to trial."
The charges will be found meritless at trial, lawyers for both men said in a joint statement. Porsche's releases about the takeover were all accurate at all times, they said.
Porsche also said in a separate statement that the charges were unfounded.
Investors have sued the company for more than 5 billion euros ($6.6 billion) claiming Porsche had long before decided to acquire its rival and lied to investors about it. Prosecutors started to probe the executives in 2009 over the same allegations.
PORSCHE SE PRESS STATEMENT
Porsche SE still considers allegations to be without merit
Stuttgart, 26 August 2014. The Higher Regional Court of Stuttgart has decided to open main proceedings against two former executive board members of Porsche Automobil Holding SE (Porsche SE). The Regional Court of Stuttgart had previously dismissed the opening of main proceedings. The Stuttgart public prosecutor had filed an appeal against this decision with the Higher Regional Court.
Based on the information available to it, Porsche SE has always taken the position that the allegations of the public prosecutor against the two former executive board members are without merit. However, the Company welcomes that finally, five years after the public prosecutor commenced investigations, these proceedings can be dealt with in court so that the accused can clear all allegations against them. Porsche SE is not a party in the proceedings and does not have access to the case files.
The public prosecutor accuses former chairman of the executive board, Dr. Wendelin Wiedeking, and former CFO, Holger Härter, of committing information-based market manipulation in connection with the acquisition of the investment in Volkswagen AG by Porsche SE in 2008. Additional charges of breach of fiduciary duty, trading-based market manipulation and infringement of requirements of the ad hoc publishing duties had already been previously dropped by the public prosecutor.