Porsche CFO Didn’t Lie to BNP About Options, Lawyer Says

Ex-Porsche SE Chief Financial Officer Holger Haerter’s lawyer attacked claims that a March 2009 e-mail to BNP Paribas SA (BNP)’s central credit committee may have influenced the bank’s decision to back part of a 10 billion-euro ($12.9 billion) loan.

The bank had already decided to provide Porsche the 500 million-euro share of the loan before the e-mail was sent, Anne Wehnert, Haerter’s attorney, told a Stuttgart court in closing arguments today, seeking an acquittal. Prosecutors claim the message downplayed the company’s liquidity needs by 1.4 billion euros if it was to acquire a 20 percent stake in Volkswagen AG. (VOW)

“This is an artificial allegation,” Wehnert said. “The prosecution puts BNP in a victim position the bank isn’t even claiming for itself.”

Haerter is on trial with one other Porsche manager on charges they lied about Porsche’s financial condition during the failed bid for Volkswagen through derivatives. Haerter has separately been charged with market manipulation along with former Chief Executive Officer Wendelin Wiedeking over the use of options in the VW bid.

Prosecutors last week asked the court to give Haerter a one-year suspended sentence and order him to pay 1 million euros. They claim he said Porsche would need to spend 4.1 billion euros to gain control of Volkswagen where the correct amount would have been 5.5 billion euros.

Credit Committee

The e-mail was sent on March 19, a few days after the Paris-based BNP credit committee had internally decided to participate in the syndicated loan. The deal was signed a few days after the e-mail was received. A Frankfurt-based BNP manager, who negotiated the agreement, had drafted the statement seeking the additional information and asked Haerter to sign it. The ex-CFO, together with two other managers, edited the text and sent it back.

Prosecutors argue the internal decision date isn’t relevant, the signature day is the time to look at. The e-mail could well have changed the opinion within the bank and was thus able to influence the decision to grant the loan.

Wehnert said such a reading overstretches the language of the law and would punish Haerter for an action that hasn’t been defined as illegal by the criminal code.

German Law

Under German law, loan fraud doesn’t require that a creditor is actually deceived. The law punishes incorrect statements that could influence the credit decision regardless of the actual effect of the statement on the creditor.

Wehnert said the e-mail wasn’t about the sports-car maker’s liquidity needs, as the BNP manager thought. It instead dealt with the net purchase price, a term looking at the success of an option strategy over a period of time, rather than the exercise price of the call options Porsche held on VW shares.

“We have heard from witness that this is a dilettantish reading of the term net purchase price,” Wehnert said. “My client isn’t to blame” because “a BNP manager used a term he didn’t understand.”

The lawyer also denied the charge that the men didn’t disclose 45 million in extra put options against which Porsche held no call options. The e-mail was intended to inform the bank that the company didn’t hold derivative of other companies, not about how many options it held on Volkswagen stock, she said.

The trial continues June 3 with closing arguments by the defense of Christian N., the Porsche finance manager standing trial alongside Haerter. A third defendant last year settled the charges again him in the case.

A verdict may come as early as June 4.

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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