At a hearing on the market manipulation allegations lodged against Porsche Automobil Holding SE, presiding Judge Stefan Puhle has somewhat declared that the plaintiffs will most likely lose its case, Bloomberg reported.
A unit of Merckle Group has been seeking around 213 million euros over the information policy of the German automaker. The news outlet said Porsche has been facing such kind of allegations ever since it has disclosed that it had access to 74.1% of VW and partly through cash-settled options in October 2008. Investopedia described cash-settled options as the type of security wherein the actual physical delivery of such security is not required to avoid high transport costs or that the purchaser itself does not wish to hold the physical evidence of its investment. Cash is said to be sent in the form of the amount of difference between the option strike price and the currently value of the security at exercise date.
Although Puhle stressed that the judges' assessment of the Merckle Group case is preliminary and could change after deliberations, he did acknowledge how smart Porsche was with its investment.
"What Porsche did was maybe what we call slyness. But was it also so morally wrong that it leads to legal liability? Slyness is generally highly valued on the markets. It's called cleverness," Puhle said.
Bloomberg said Porsche had won a dismissal of a related case brought by a group of 23 hedge funds in a court in Stuttgart in March. The judges there had thrown out criminal charges lodged against former Porsche Chief Executive Officer Wendelin Wiedeking and ex-Chief Financial Officer Holger Haerter over the issue. The same Braunschweig tribunal was said to have dismissed two albeit smaller civil cases two years ago.
At the moment, there are currently five cases pending in Braunschweig, and a second, 1.3 million euro-case is expected to be heard later today. The judges reportedly set a schedule to rule on all cases for July 30.
