21 Aug 2009

Porsche accused of manipulating market

6:14 pm on 21 August 2009

German authorities are investigating the former chief of sports car manufacturer Porsche over allegations of market manipulation and insider trading.

Porsche had attempted to acquire Volkswagen, its much larger German rival, causing the share price of Volkswagen to soar, the BBC reports.

The offices of Porsche have been raided by federal prosecutors investigating the alleged market manipulation of Volkswagen shares.

The inquiry centres on former chief executive Wendelin Wiedeking and finance chief Holger Haerter, who both resigned in July.

The carmaker had built up a stake of 51% in VW in an attempt to launch a takeover of Europe's biggest carmaker.

Porsche denied the accusations and said it would co-operate with prosecutors.

The carmakers have subsequently agreed to a merger, ending months of bitter feuding, which will take place in 2011.