Bloomberg News

BNP Cleared Porsche Loan Without Data on Options, Lawyer Says

November 08, 2012

BNP Paribas SA (BNP) cleared a loan for Porsche SE without requiring details about options the carmaker was using to prepare a hostile bid for Volkswagen AG (VOW) in 2009, a defense lawyer argued in a German trial over the issue.

“Information about the derivative positions weren’t a parameter the credit committee wanted to take into account,” said Daniel Krause, defense lawyer for a former Porsche tax manager. “While that information was requested by the local Frankfurt BNP unit, the credit committee in Paris had decided not to make the status of the derivatives a condition for the loan.”

Charges that Porsche’s former Chief Financial Officer Holger Haerter and two other defendants downplayed the company’s liquidity needs when applying for the loan are contradicted by e-mails exchanged at the time, Krause said. BNP’s credit committee agreed to provide the loan six days before the men sent an e-mail with what prosecutors claim was false information, Krause said.

Haerter is on trial in Stuttgart with two other Porsche managers on charges they downplayed Porsche’s liquidity needs for a hostile Volkswagen bid using derivatives. Prosecutors claim the men also concealed 45 million put options on Volkswagen shares Porsche sold at the time. All three have denied the allegations.

Prosecutors are relying on an e-mail sent March 19, 2009, by Porsche managers to BNP with the option figures. Krause cited a BNP e-mail dated March 13, 2009, that was also read in court today. It listed the conditions the credit committee had used for its decision. It didn’t mention the options data. The loan was signed March 24, 2009.

Credit Decision

“An internal decision by the credit committee isn’t what’s crucial under the law, but what information the bank had when it finally signed the loan agreement,” prosecutor Reto Woodtli told the court in response today. “The law requires the abstract potential of the misleading statement to influence a credit decision -- and that is met here.”

Joachim von Schorlemer, BNP’s former German head, who was originally scheduled to testify today, will be questioned on Nov. 27.

The case is part of a broader criminal investigation into Porsche’s Volkswagen bid that later faltered. Stuttgart prosecutors are still probing Haerter and former Chief Executive Officer Wendelin Wiedeking on allegations of market manipulation and breach of trust.

To contact the reporter on this story: Karin Matussek in Stuttgart via kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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