Porsche Loan Request Left Out $1.8 Bln Need, Witness Says

Allegations former Porsche SE Chief Financial Officer Holger Haerter downplayed the carmaker’s liquidity needs when pursuing a bank loan for a planned takeover of Volkswagen AG (VOW) in 2009 were supported by a witness at the former executive’s loan-fraud trial.

A former BNP Paribas SA (BNP) employee who worked on the bank’s 500 million-euro ($647.4 million) share of a planned 10 billion- euro loan testified at a Stuttgart court today that information indicated the carmaker’s liquidity need was 4.1 billion euros. Torsten Mueller, when questioned by judges, said he was never under the impression the company needed about 1.4 billion euros more than that, which is what prosecutors have said.

“That would be news to me,” Mueller said. “Had it been more, we would have been talking about a dimension that was very substantial, and we should have known that.”

Haerter is on trial with two other Porsche managers on charges they downplayed Porsche’s liquidity needs for a hostile Volkswagen bid using derivatives. Prosecutors claim the men also concealed 45 million put options on Volkswagen shares Porsche sold at the time.

All three denied the charges on the first day of trial last month.

Had BNP known about the 45 million options, the factual basis for the loan decision would have changed and the risk department would have asked for a new assessment, Mueller said. He testified he couldn’t tell whether that would have led to a different decision on the loan request.

“It’s in the nature of the process that you expect a full picture of the data in such a transaction,” said Mueller.

The case is part of a broader criminal investigation into Porsche’s Volkswagen bid that later faltered. Stuttgart prosecutors are still probing Haerter and former Chief Executive Officer Wendelin Wiedeking over allegations of market manipulation and breach of trust.

To contact the reporter on this story: Karin Matussek in Stuttgart via kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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