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VW’s Porsche CEO probed by prosecutors: Stuttgarter Nachrichten

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Via Reuters Finance

FILE PHOTO: Oliver Blume, CEO of Porsche AG, speaks during a Porsche press conference at the Los Angeles Auto Show in Los Angeles, California, U.S. November 28, 2018. REUTERS/Kyle Grillot/File Photo

FRANKFURT (Reuters) – German prosecutors are investigating the chief executive of Volkswagen’s Porsche business, Oliver Blume, over a possible breach of fiduciary trust tied to payments made to a Porsche works council member, a newspaper reported on Wednesday.

By approving the payments, Blume and other Porsche staffers may have contributed towards a misuse of corporate funds, the Stuttgarter Nachrichten said, without citing sources.

The Stuttgart prosecutor’s office declined to comment. Porsche declined to comment on whether Blume, who is also a member of the Volkswagen board, was being probed, saying it never discusses details of an investigation.

Stuttgart prosecutors said on Tuesday they had searched Porsche’s offices as part of a broader probe involving 176 police and tax inspectors as well as 10 state prosecutors.

Porsche managers are being investigated on suspicion of having granted “disproportionate” payments to a member of Porsche’s works council, the prosecutor’s office said on Tuesday, without elaborating.

Stuttgarter Nachrichten said on Wednesday Blume’s offices were searched in connection with this probe.

A severe breach of fiduciary trust for potential misuse of funds is a criminal offence and can carry a penalty of up to 10 years in jail.

Former Deutsche Bank Chief Executive Josef Ackermann stood trial for breach of fiduciary trust for granting bonus payments to Mannesmann executives. The charges were later dropped in exchange for a 3.2 million euros ($3.6 million) non-penal payment.

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($1 = 0.8965 euros)

Reporting by Edward Taylor; Editing by Mark Potter

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