The merger of German automakers Volkswagen and Porsche that should have been completed in the second half of 2011 could be delayed until 2012 because of a criminal investigation involving the former CEO and CFO of Porsche.
Sports car manufacturer Porsche shares fell by 11% after the announcement that there is a lower chance that the merger will take place this year.
At 12:48 GMT, Porsche shares were down 9.6% at 56.69 euros, while VW securities fell by 2.2%.
“Investors believe that, as the merger takes longer than expected, the fewer the chances of success are” said Markus Huber, a trader at ETX Capital company.
Stuttgart Prosecutor’s office announced that it has expanded an investigation into former CEO Wendelin Wiedeking and CFO Holger Haerter, and the investigation will be completed before the end of this year.
Porsche tried in 2009 to take over VW using derivative financial instrument transactions, but dropped out due to a high accumulation of debt. Subsequently, Porsche has accepted a takeover offer from VW, and the executives were dismissed.
Wiedeking and Haerter are being investigated for market manipulation in connection with transactions in VW shares and have been sued in the United States by hedge funds.
The charges relate to market manipulation, as they have not provided investors with accurate information on the VW & Porsche intentions. The two former executives, initially suspected of breach of trust, are now accused of taking risks that could have endangered the survival of Porsche.