Porsche

Germany Porsche Holding SE (‘Porsche’) is a listed company with a majority stake (~52,2%) in Volkswagen AG’s (‘VW’) ordinary shares. As a consequence, Porsche’s listed preferred shares dropped by more than 30% in value when VW admitted it had installed defeat devices, which were designed to cheat emissions tests in certain car models. At the end of December 2018, a group of investors advised and assisted by Deminor Recovery Services registered their claims against Porsche with the model case proceeding (‘KapMuG’) before the Higher Regional Court of Braunschweig in which VW and Porsche are both model defendants. Deminor advised claimants to register their claims rather than issuing proceedings given that several key procedural and substantial issues remain uncertain. The registration of claims has had the effect of tolling the statute of limitations. Investors can issue proceedings against Porsche once the uncertainties are resolved.

A parallel proceeding against Porsche before the Higher Regional Court of Stuttgart was dismissed in 2023. Positively, the court did decide that Porsche as a holding company without an operating business, may itself be subject to an ad hoc disclosure obligation in respect of events arising from the business activities of VW does not in itself preclude such obligation. However, the court also held that any positive knowledge of members of the board of management of VW who are or were at the same time members of the board of management of Porsche arising from their activities for VW shall not automatically be attributed to Porsche. Instead, the court took the view that the burden of proof is upon the plaintiff to prove that Porsche had (attributable) knowledge of insider information that allegedly would have to have been published, this being a prerequisite for a claim under section 37b (1) WpHG.

The model plaintiff has appealed the decision and it is now pending with the Federal Court of Justice (court file no. II ZB 9/23, c.f. press release of the FCJ dated 16 May 2023).