Porsche faces fresh probe

August 31, 2009

, FRANKFURT, Aug 31 – German sports car maker Porsche faces a fresh probe into insider trading charges linked to its failed attempt to take over Volkswagen, a prosecutor\’s spokesman told AFP on Monday.

An investigation by the prosecutor\’s office in Frankfurt, western Germany, was launched as a result of suspected stock market manipulation, though no individual was a specific target in the probe, the spokesman said.

The enquiry follows one by prosecutors in Stuttgart, southwestern Germany, where the homes and offices of Porsche directors were raided earlier this month.

Porsche shocked the stock market in October when it announced that it held options which would allow it to raise its stake in Volkswagen, the biggest European automaker, to around 75 percent.

VW shares spiked to more than 1,000 euros on the news, briefly making it the biggest company in the world by market capitalisation.

Institutional investors such as pension funds reportedly lost large sums of money at the time when they were caught out by the move and the subsequent sharp fall in VW shares and are now filing complaints, the business magazine WirtschaftsWoche reported on Monday.

The funds are reportedly claiming damages worth up to 100 million euros (143 million dollars), the magazine said.

Slammed by the global auto crisis, Porsche finally abandoned its attempt to take over VW, which is now set to take control of Porsche as its 10th brand.

In mid-afternoon trade, VW shares were down 0.44 percent at 135.06 euros.

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