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Wolfgang Porsche, chairman of the German car manufacturer, and fellow board member Ferdinand Piech are being sued by seven hedge funds alleging dishonesty over the company’s failed bid for Volkswagen.
The hedge funds, which accuse Porsche of misleading markets before the takeover attempt, want compensation of €1.8bn ($2.4bn, £1.5bn). Porsche had dismissed speculation that it was targeting Volkswagen but then revealed it owned or had positions on almost 74% of Volkswagen shares.
The announcement caused a run on Volkswagen shares by investors that had held back fearing the stock would fall.
The company, which denies any wrongdoing, said: “Porsche SE and its supervisory board members will defend themselves with all available legal means.”
Porsche’s takeover bid eventually failed as the global financial crisis and the automotive sector slump blocked their efforts to raise the funds to purchase the necessary 75%. Then Volkswagen acquired 49.9% of Porsche in 2009 and finally bought the remainder in 2012.
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