STUTTGART (Bloomberg) -- Former Porsche Chief Financial Officer Holger Haerter was fined 630,000 euros ($824,000) by a German court today for credit fraud in a criminal case over the refinancing of a 10 billion euro loan during a failed bid to buy Volkswagen in 2009.
Former Porsche CFO Haerter fined for credit fraud in VW case
Public prosecutors in Stuttgart, where Porsche is based, had sought a 3-year suspended prison sentence plus a 1 million euro fine, while Haerter's lawyers wanted an acquittal.
The court ordered Haerter to pay 180 daily installments of 3,500 euros for making incomplete and wrong statements about the value of VW share derivatives held by Porsche.
Haerter downplayed Porsche's liquidity needs and failed to disclose the correct number of put options on VW shares that Porsche held during negotiations with French bank BNP Paribas about the lender's 500 million euro share of the syndicated loan, a Stuttgart judge said.
"The information given by the defendants was wrong," Presiding Judge Roderich Martis said as he delivered the verdict of the Stuttgart Regional Court today.
He said: "It doesn't matter that they gave the correct information earlier in the process. It's true also in normal life that a lie doesn't disappear just because you once said the truth some time before."
Haerter said he would appeal the conviction. "Many things said were wrong. We will appeal. We are sure we will win," he said.
Today's case is the first criminal verdict in a string of proceedings related to the VW takeover bid in which Porsche was using an options strategy. Porsche is also facing civil suits seeking a total of about 5.5 billion euros in Germany, and prosecutors have extended their market-manipulation probe to cover the 2008 members of Porsche's supervisory board.
In a separate indictment in December, prosecutors charged Haerter and former CEO Wendelin Wiedeking over the use of VW options in the bid. It's not yet been decided whether that case, in which both have denied wrongdoing, should go to trial.
A Porsche finance manager was also convicted alongside Haerter today. The man, who can be identified only as Christian N., was fined 63,000 euros. In the trial, prosecutors claimed the two defendants downplayed the company's liquidity needs by 1.4 billion euros if it was to acquire a 20 percent stake in VW and failed to disclose Porsche at the time held 45 million put options against which it had no call options.
"It's been clear between all the persons involved here, at BNP and Porsche, that the term 'net purchase price post collateral' was used here to describe which amount would have to be paid at that time to increase the stake in VW by 20 percent," Martis said. "You may call that liquidity or, as a BNP managers did, 'cash out of the pocket,' it doesn't matter which term you use."
Publicly traded holding company Porsche Automobil Holding SE sold the Porsche sports car business to VW last year. Porsche SE owns 50.7 percent of VW's ordinary shares.
Reuters contributed to this report
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