Porsche SE (PAH3) can’t appeal a ruling saying Ferdinand Piech violated his duties when commenting in 2009 about options transactions done as part of a takeover bid for Volkswagen AG. (VOW)
The Federal Court of Justice, Germany’s highest civil court, refused a full review of a February ruling that VW Chairman Piech, who is also on Porsche’s supervisory board, was wrong to tell reporters he didn’t know -- and hadn’t sought clarity on -- the amount of risk Porsche faced on options it held. The lower tribunal was right to call this a grave violation, the judges said in their ruling.
“A supervisory board member acts against his duties, and thus against the law, if he doesn’t fulfill his monitoring tasks,” the top court said in the decision posted on its website. “These duties require that he keeps himself informed about grave risks of transactions the management is taking, and that he is able to judge them independently.”
The lower court ruling voided votes by Porsche shareholders that discharged Piech and the rest of the supervisory board from responsibility for fiscal year 2008/2009. The decision doesn’t mean Piech has to pay damages related to the comments, made at a press event in Sardinia.
The case is one of several disputes stemming from the failed Volkswagen takeover in 2009, which included Porsche’s use of options to build its stake. Porsche racked up more than 10 billion euros ($13.1 billion) of debt in the process. Porsche, which completed the sale of the unit that makes the 911 sports car to VW this year, is now a holding company for 50.7 percent of Volkswagen’s common shares.
The judges also said the lower court was right to find Piech violated his duties when he said that no one could properly judge the risks of the option transactions.
Porsche will review the ruling and analyze which other steps it can take to prevail with its assessment that the supervisory board didn’t violate any of its duties, the company said in an e-mailed statement.
The case is BGH, II ZR 111/12.
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