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Investors sue Porsche over failed VW merger

A group of investment funds is suing Porsche for €2 billion ($2.6 billion) in damages after the German luxury sports car firm's merger with the Volkswagen group failed in 2008, the fund's lawyers said Saturday.

Investors sue Porsche over failed VW merger
Photo: DPA

The money is supposed to cover fund losses after Porsche stunned markets with its announcement in October 2008 that it was acquiring 75 percent of Volkswagen, leading to a massive surge in the value of VW shares, lawyers said in a statement.

VW shares briefly shot above €1,000, but at the time Porsche stressed it was not responsible for the panic buying, reportedly by investment funds, that had seen VW stock hit the roof after Porsche unveiled its position.

Porsche’s bid to take over VW ultimately failed and the indebted luxury car maker was in turn saved by Volkswagen.

In their lawsuit, the investment funds argue that Porsche manipulated the stock market as its announcement that it was taking over Volkswagen and the reasons for its move had come late.

US investment funds have already filed another complaint against Porsche, which says their action is “unfounded.”

Plaintiffs in the lawsuit filed in the New York State Supreme Court in March claim that actions by Porsche caused them to lose more than €1 billion.

A group of 39 investment funds filed a suit against Porsche in 2010 charging that the German car-maker lied about its plans to take over the biggest European carmaker.

AFP/bk

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FARMING

WTO rules US tariffs on Spanish olives breach rules

A US decision to slap steep import duties on Spanish olives over claims they benefited from subsidies constituted a violation of international trade rules, the World Trade Organisation ruled Friday.

WTO rules US tariffs on Spanish olives breach rules
Farmers had just begun harvesting olives in southern Spain when former US President Donald Trump soured the mood with the tariffs' announcement. Photo: Jorge Guerrero/AFP

Former US president Donald Trump’s administration slapped extra tariffs on Spain’s iconic agricultural export in 2018, considering their olives were subsidised and being dumped on the US market at prices below their real value.

The combined rates of the anti-subsidy and anti-dumping duties go as high as 44 percent.

The European Commission, which handles trade policy for the 27 EU states, said the move was unacceptable and turned to the WTO, where a panel of experts was appointed to examine the case.

In Friday’s ruling, the WTO panel agreed with the EU’s argument that the anti-subsidy duties were illegal.

But it did not support its stance that the US anti-dumping duties violated international trade rules.

The panel said it “recommended that the United States bring its measures into conformity with its obligations”.

EU trade commissioner Valdis Dombrovskis hailed the ruling, pointing out that the US duties “severely hit Spanish olive producers.”

Demonstrators take part in a 2019 protest in Madrid, called by the olive sector
Demonstrators take part in a 2019 protest in Madrid called by the olive sector to denounce low prices of olive oil and the 25 percent tariff that Spanish olives and olive oil faced in the United States. (Photo by PIERRE-PHILIPPE MARCOU / AFP)
 

“We now expect the US to take the appropriate steps to implement the WTO ruling, so that exports of ripe olives from Spain to the US can resume under normal conditions,” he said.

The European Commission charges that Spain’s exports of ripe olives to the United States, which previously raked in €67 million ($75.6 million) annually, have shrunk by nearly 60 percent since the duties were imposed.

The office of the US Trade Representative in Washington did not immediately comment on the ruling.

According to WTO rules, the parties have 60 days to file for an appeal.

If the United States does file an appeal though, it would basically amount to a veto of the ruling.

That is because the WTO Appellate Body — also known as the supreme court of world trade — stopped functioning in late 2019 after Washington blocked the appointment of new judges.

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