Homes Of Ex-Porsche CEO And CFO Searched In Insider Trading Probe

GERMAN AUTHORITIES have raided the homes and offices of Porsche's ex-CEO Wendelin Wiedeking and former Chief Financial Officer Holger Haeter, as part of  investigations into 'insider trading' allegations against the pair.

Wiedeking and Haeter were the driving forces behind Porsche's bid to acquire a controlling stake in Volkswagen AG, and, prior to the global financial crisis, had put the company in prime position to take over VW.

For a brief period last year, Porsche's high stake in VW and whispers of a merger between the two companies created a huge spike in VW's share prices.

However, according to German newspaper Der Spiegel, the investigations into Wiedeking and Haeter are focussed not on the artificially-boosted VW shares, but on allegations that Porsche sought to collude with a Frankfurt bank to "stabilise the VW share at a certain level to stop the share price from again fluctuating dangerously".

Porsche had collected a 51 percent stake in Volkswagen by the end of 2008. The takeover bid however collapsed earlier this year after deteriorating economic conditions left Porsche with massive debts and no way of raising enough capital to purchase a 75 percent controlling share of VW.

Both Wiedeking and Haeter resigned after the takeover collapsed. Volkswagen, who emerged the victor, now plans to purchase a 42 percent stake in Porsche.