18/03/2016 World Business Report

Sports cars, but unsporting behaviour.

Did Porsche's former bosses lie to investors,

Is this the answer to South Africa's energy crisis?

We visit one of the African continent's largest

Toshiba revealed that is under investigation in the US over its

$1.3 billion accounting scandal. We start in Germany, with a scandal

that has engulfed one of the biggest names in the country's vast car

industry and cast a shadow over the No,

it's not Volkswagen and Dieselgate this time, but its stablemate

Porsche that's in the spotlight. The ex-CEO of Porsche,

Wendelin Wiedeking, on the left, and former chief financial officer

Holger Haerter on the right are on trial for alleged stock market

manipulation. Mr Wiedeking and his former

colleague both deny the charges. If convicted they could face more

than two years in jail and fines Today, a court

in Porsche's home city of Stuttgart Let's take a look at the background

to this long-running trial. The charges relate to Porsche's

failed attempt to take over VW back Between March and October

of that year, Porsche issued five public denials that it was planning

a takeover of VW. All the while, say prosecutors,

it was building up a stake in the company but trying to keep

the share price down. It did that by giving false

information to investors. When the plan finally emerged,

shares soared, leaving hedge funds who had bet against them with losses

of 30 billion euros. Porsche's funding dried up

because of the financial crisis It was itself left with huge debts,

some ten billion euros. Ironically, that paved the way

for Porsche to end up being taken Damien McGuinness is our Germany

business correspondent. You have been following this case

for some time. It is quite extraordinary how this one

billionaire family managed to garner so much power over a company that

was effectively, at one point, the world's most valuable. Tell us more.

That's right and this whole story can be quite confusing, because we

are effectively talking about three different Porsches. One is the car

brand, now owned by BW, the other is the company Porsche. This is the

company that is having problems today, because it is the two

executives of that company who I now standing trial and the verdict will

be heard later today. The third thing is the Porsche family, which

initially set up BW and it is the ancestor of the daily's Porsche

family, which created the VW beetle. And the Porsche family are the full

bonus of the Porsche company and it is that which is now the majority

shareholder of VW. So you've got companies that are intertwined and

when the company first broke -- scandal first broke out it caused a

lot of publicity because the Porsche family is iconic era. That's because

of the original maker of the VW beetle but also because this is one

of the richest families in Germany. So the scandal really gets a lot of

publicity here. It will be very complicated, but the central

contention is that this two top officials at the Porsche holding

company set out to manipulate the stock price to maintain the

family's well. What's interesting is that no members of the Porsche

family themselves are on trial. That's right, because the Porsche

family are not accused of market manipulation, it is just the two

executives. That's why it is important for us to differentiate

between a family, the company and the brand. They are three very

different things. But if today's verdict is guilty, this will have

big ramifications on the whole group. Because on the one hand, as

we know, the Porsche family owns this company, which, if the

executives are found guilty of market manipulation, that doesn't

reflect well on the shareholders in this company or the owners of this

company. The other thing to bear in mind is that Porsche, the company

today, is the majority shareholder of VW. Diesel gate has already hit

VW hard, so the last thing it needs is another scandal. That's why VW

and the Porsche family are no doubt now hoping for an innocent verdict.

It also has to be remembered that charges like this market

manipulation are incredibly difficult to prove and in most cases

is no prosecution after such an investigation, because it is

difficult to prove market manipulation like this. Thank you

very much. I know you will keep a night on a trial. -- keep and -- an

eye. Let's move to Asia now

and another corporate scandal. Technology giant Toshiba says its US

units are being investigated by US It says the US

Department of Justice and the Securities and Exchange Commission

have both requested information. According to Bloomberg News,

US authorities are opening a case on the Japanese conglomerate

even though it has already been investigated in Japan

and could exert jurisdiction because the case involves US based

division Westinghouse. What more can you tell us about

this? Essentially, Toshiba says they are cooperating with US authorities

and they said that several of its US subsidiaries had been requested to

provide information by the US Department of Justice and securities

and that they are indeed helping with that, although they refrained

from saying which subsidiaries were actually... A didn't name them. So

essentially the trouble of unease conglomerate nonetheless actually

saw shares rise in today, they are up over 4%, and that's after news

that they are selling their medical equipment unit to Canon for nearly

$6 billion. That defied the slump we are seeing in the Nikkei, which is

down more than 2%. But its shares, if you recall yesterday, have fallen

8% after that report that you mentioned from Bloomberg. Toshiba

also says they are planning to sell a majority stake in their home

appliance business to a Chinese group. Basically it is doing this to

raise money after that major accounting scandal that you

mentioned last year. That of course led to record losses and job cuts

for Toshiba. The company is hoping to restructure their bloated with

its operations and we will be watching closely because there's a

new core -- news conference in a few hours, where they will be announcing

any term business plan. We will leave it there, but thank you very

much for your time. To South Africa now,

where the government hopes this could be the answer to

the country's energy crisis. Over the past year South Africa has

struggled to meet We've had rolling blackouts

and power cuts have caused huge headaches for business and hit

productivity across the economy. Our correspondent has been the

Kimberley in the northern cape defined a -- to have a look at a

possible solution. Power from the sun. In the northern cape of South

Africa's sunshine is in abundance. Harnessing the power would seem to

be a logical step towards solving part of the energy crisis. It is a

crisis which is well documented. A strange grid, blackouts and now

problems with price. As South Africa is predominantly powered by call,

renewable energy is becoming more attractive. -- coal. It is one of

the largest solar farms and generate up to 96 megawatts of energy. The

company behind this project hopes to capitalise on the need. There will

always be a huge need for power in South Africa and will see that going

into the next 100 years. -- we will see that. Power forms the basis of

any developing country and economy. These provide a sustainable return

on investment. The government hopes to increase its renewable energy

base. Currently, 6% of energy generated in South Africa comes from

renewable energy projects such as this. It is expected to grow to 15%

over the next few years and is becoming an increasingly important

source of energy for this country. But it is not all sunshine for green

energy companies. The low prices of oil, gas and coal can make renewable

projects seem expensive and several firms have been bankrupt in recent

months. And that's not the only challenge. A lot of the problems are

resolved... Just the assets in developing countries generate

revenue streams in the local currency and the debt from these

international developers is in dollars, so they see a decline in

revenue stream in US dollars and it is unable to meet the financial

needs to repay the debt, which is in dollars.

While South Africa is making efforts to increase the prominence of its

renewable energy resources, the industry does face challenges. The

country also has a nuclear power deal on the horizon which could

potentially generate up to 100 times more power than the biggest solar

project. However, South Africa's economy needs a stable source of

energy if it is to show any signs of reasonable growth in the future. As

such, experts feel renewables like solar power and wind power should

have an increasingly important role to play in power generation. That's

it from me for the moment. Back with the papers in about five minutes.

See you then. Train companies are being told to

encourage customers to claim