The offices of German luxury carmaker Porsche have been raided by federal prosecutors probing the alleged market manipulation of Volkswagen shares.
Porsche had built up a stake of 51% in VW in an attempt to launch a takeover of Europe's biggest carmaker.
The two have subsequently agreed to a merger, ending months of bitter feuding, which will take place in 2011.
The carmaker denied the accusations and said that it would co-operate fully with the prosecutors.
Failed takeover
"On Thursday morning, officers from Stuttgart prosecutors entered the company's offices with search warrants.
"The prosecutors suspect a breach of public disclosure requirements and market manipulation," Porsche said.
Under former chief executive Wendelin Wiedeking, who resigned last month, Porsche built up a majority stake in the much larger VW, but failed in its attempt to force a full takeover.
As a result, the carmaker was saddled with huge debts.
Porsche announced last week that the state of Qatar would take a major stake in the company. - bbc news
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