Mon, Mar 20, 2017 - Page 14 News List

Ex-VW chief causes worry with intent to sell big stake

NY Times News Sercvice, BADEN-BADEN, Germany

Ferdinand Piech, the scion of an automaking dynasty that dominated Volkswagen AG for two decades, is trying to sell his substantial stake in the company to members of his extended family, which could create uncertainty in the aftermath of the automaker’s diesel deception.

Piech, a former Volkswagen chief executive and supervisory board chairman, was often a source of discord among the quarrelsome Piech and Porsche clans, which own more than 50 percent of Volkswagen’s voting shares. His exit might make it easier for them to push through changes needed for Volkswagen to recover from the emissions deception, which weighs heavily on the company.

The tight control has led to criticism that the family was too slow to make the changes in management and company culture that are needed to move beyond the scandal.

Most of the rest of Volkswagen’s shares are owned by the German state of Lower Saxony and the sovereign wealth fund of Qatar, which tend to side with the family.

However, implicit in the Friday disclosure by Porsche Automobil Holding SE, the holding company for the family’s combined stake, was that Piech could sell his stake of about 15 percent, valued at 1.1 billion euros (US$1.18 billion), to an outsider if he could not agree on terms with his relatives. That would deprive the family of a majority and create uncertainty about the company’s direction.

“I expect that the family will not be able to raise the purchase price and that outside investors — for example from China — would come in,” University of Duisburg-Essen professor Ferdinand Dudenhoffer said in an e-mail. “The Chinese would not pass up such a chance.”

Wolfgang Porsche, a spokesman for Porsche family members, had told German news media that the relatives would be willing to buy the stake.

Even if they were unable to, the family would not have a problem with a new outside shareholder, he said in comments confirmed on Friday by a spokesman for Porsche Automobil Holding.

Word that Piech might sell his stake comes after a tumultuous week for Volkswagen that showed how much the emissions scandal continues to damage the company’s reputation.

On Wednesday last week, German investigators searched offices of the Audi unit and of the law firm that has been conducting an internal investigation to determine who is responsible for the scandal.

Jones Day, the law firm, was hired by the Volkswagen supervisory board, which is dominated by members of the Porsche and Piech families or their allies.

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