INVESTORS SUING Porsche SE over its botched 2008 takeover of Volkswagen suffered a setback to claims for more than €4 billion of damages as German court hearings yesterday exposed initial cases as sketchy.
Swiss investment company My Capital-MC and a German private investor, seeking compensation for €4.7 million of losses from short-selling VW shares in a bet that the price would fall, have yet to convince German judges of Porsche’s wrongdoings.
“There are high hurdles” to prove that the sports car manufacturer violated legal standards defined by Germany’s top civil court, said judge Stefan Puhle after three hours of hearings at the regional court in Brunswick, northern Germany.
“This is a tough act to prove,” added Mr Puhle, noting that one of the two claimants even failed to adequately explain the level of damages claims.
Investors say that throughout 2008 Porsche concealed its plans to acquire VW and instead secretly piled up its holding.
In March 2008, Porsche dismissed rumours that it was pursuing a takeover of the much-bigger VW. Seven months later, however, it disclosed that it held almost 75 per cent of VW shares, of which 31.5 per cent were previously undisclosed cash-settled options.
The Brunswick court has scheduled a ruling on both cases for September 19th.
Hearings on three other lawsuits, including a case brought by Elliott Associates and other US investment funds for €2 billion in damages, have yet to be scheduled.
“At the moment, the court does not yet follow our reasoning,” said Franz Braun, who represents plaintiffs in three of the five lawsuits.
Porsche’s statement of October 26th, 2008, caused VW shares to surge to €1,005 within days, briefly making the Wolfsburg-based carmaker the world’s most valuable company as short-sellers raced to cover positions.
Porsche SE, the publicly traded holding company that owns stakes of just over 50 per cent in the German sports carmaker and in VW, has repeatedly denied the allegations. “We’re satisfied with the negotiations,” Porsche spokesman Wolfgang Glabus told reporters in Brunswick. “Today was a step in the right direction.” – (Reuters)