Ferdinand Piech violated his duties when commenting in 2009 about options transactions by Porsche SE done as part of a takeover bid for Volkswagen AG, a German court said.
Piech, chairman of VW and also a member of Porsche’s supervisory board, was wrong to tell reporters at an event in Sardinia that he didn’t know the amount of Porsche’s option risks and that he hadn’t sought clarity about it, the Stuttgart Higher Regional Court said. The decision was part of a ruling voiding votes by Porsche shareholders that discharged Piech and the rest of the supervisory board from responsibility for fiscal year 2008/2009, the court said in a statement.
“If you take those words literally, Piech would have committed a grave violation of his duties as a supervisory board member which include assessing important Porsche transactions,” the court said. “He wouldn’t have been allowed to consent to those transactions, should have sought more information and --if it didn’t allow him to understand the trades -- should have acted against them.”
The case represents one of a number of disputes stemming from the failed Volkswagen takeover in 2009, which included Porsche’s use of options to build its stake. Porsche racked up more than 10 billion euros ($13.5 billion) of debt in the process.
Piech’s words could also be understood as a critical comment, as part of the controversy within the company at the time, arguing that the risk from the options was incalculable, the judge said. Such a statement is also improper because it would endanger Porsche’s creditworthiness, the court said.
Porsche spokesman Frank Gaube said the company is disappointed the court didn’t follow its arguments. The carmaker said in a statement it will ask Germany’s top civil court to allow an appeal of the ruling.
The case is OLG Stuttgart, 20 U 3/11.