Porsche offices raided in share probe

Ex-chief executive Wendelin Wiedeking is among the Porsche figures being investigated by the German authorities over share manipulation claims. Yesterday Porsche's headquarters were raided in the course of investigations into recent trading activities.The allegations revolve around the failed takeover of Volkswagen, during which Porsche took large positions in VW stock. Prosecutors allege that inside information was leaked in pursuit of the failed bid.Since the trading activities in question, VW has gone on to mastermind a merger with Porsche, after the luxury carmaker overstretched itself, accumulating high debt levels in the course of its bid attempt. Wiedeking and former chief financial officer Holger Harter left Porsche last month ahead of the merger and the company said: "Mr Wiedeking and Mr Harter are supporting the prosecutors fully."Volswagen's share price soared as Porsche accumulated its holding, however there were suggestions that it had misled the market over its intention to take over VW. Porsche denied any disclosure irregularities but many hedge funds and investment management firms were left wrong-footed after it made a shock announcement that it held more than 50 per cent of VW's shares. German regulator BaFin dropped its initial investigation but re-opened it after claims that the incident was bringing the entire German stock market into disrepute.

WHAT ARE THEY SAYING:Henning Gebhardt, head of equities at fund manager DWS, in the Financial Times: "The finance ministry signalled to us last year that they would do something. We are still waiting for that to happen."

Jack Ewing in BusinessWeek: "[The] architects of the takeover attempt, resigned in July, so there's a good chance the investigation will not be a big distraction to the new management team led by former production chief Michael Macht. But Porsche's image may already have suffered from the interminable power struggle with Volkswagen. The mass-market carmaker faces a delicate task integrating Porsche without diluting the gold-plated brand. A criminal investigation won't make the job any easier." ·