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Porsche Facing Potential Scandal?

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More details are coming to light.

We recently discovered that German prosecutors along with police and tax officials conducted a raid at Porsche's Stuttgart and Weissach offices. German authorities were reportedly investigating allegations involving bribery and "breach of fiduciary trust." Porsche stated it was fully cooperating with investigators but refused any additional information. It turns out there was one specific individual "being probed on suspicion of having leaked confidential information to a tax advisor of Porsche AG in exchange for receiving favors."

Today, the identity of that individual has become known. Reuters reports that German prosecutors are investigating Porsche CEO Oliver Blume. That's right, another possible scandal involving another top Volkswagen Group official.

This time, however, it has nothing to do with Dieselgate, but rather whether Blume and other Porsche staffers contributed towards misuse of corporate funds. Blume's offices were also specifically targeted in the search. Neither Porsche nor the prosecutor's office offered any additional comment. This investigation could spell real trouble for the German automaker because Blume is also a member of the Volkswagen board. A total of 176 police and tax inspectors along with 10 state prosecutors were involved in the raid, meaning this isn't just some possible misunderstanding. Authorities must have obtained strong evidence beforehand somehow (a whistleblower?).

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A major breach of fiduciary trust for potential misuse of funds is a serious criminal offense in Germany, with a penalty of up to a decade in prison along with likely hefty fines. At this stage, Blume and the other unnamed Porsche managers are innocent until proven guilty but clearly something serious is going on. How this all proceeds likely depends on what additional evidence, if any, authorities gathered in the raid. Considering Porsche is very profitable for the Volkswagen Group and the already delicate situation the automaker found itself in following the diesel emissions revelations and its years-long struggle to recover its good name, it'll be interesting to see whether the VW board stands behind Blume.

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