Wolfgang Porsche and his cousin and Porsche board member Ferdinand Piech are being sued by seven hedge funds over its failed takeover bid for Volkswagen.
They are seeking 1.8 billion euros ($2.4 billion) in compensation.
Porsche has been accused of misleading markets in the run-up to its takeover bid for VW in 2008.
Porsche initially dismissed speculation it was seeking to takeover VW, but later revealed that it owned or had positions on almost 74% of VW shares.
Some investors had bet against Volkswagen shares, expecting them to fall in the absence of any firm takeover bid from Porsche.
However, Porsche’s disclosure of an increased holding triggered an unprecedented stock market squeeze on VW shares as investors rushed to buy them to cover their short positions.
Wolfgang Porsche and his cousin Ferdinand Piech are being sued by seven hedge funds over its failed takeover bid for Volkswagen
Porsche, which has earlier faced similar cases, has denied any wrongdoing.
“Porsche SE and its supervisory board members will defend themselves with all available legal means,” the carmaker said.
Porsche’s attempt to take over Volkswagen eventually failed as it fell short of acquiring the required 75% stake.
The global financial crisis and the slump in the automotive sector made it difficult for the carmaker to raise enough money to buy the remaining stake.
Nevertheless, it accumulated large amounts of debt in the process and was sued by investors who accused it of misleading them.
In a dramatic turnaround of events, the firms agreed a deal in 2009 under which Volkswagen agreed to take over Porsche.
Volkswagen acquired a 49.9% stake in Porsche in 2009.
In 2012, the firms agreed another deal, under which Volkswagen bought the remaining 50.1% stake in Porsche for 4.46 billion euros plus one VW common share.
Porsche, Audi and Bentley – Volkswagen’s luxury brands – have posted record sales in 2013 helped by new model launches and a recovery in the global car market.
Porsche’s deliveries jumped 15%, Audi’s 8.3% and Bentley posted a growth of 19% in 2013, from a year earlier.
Demand for luxury cars has been growing in emerging markets such as China and India amid rising income levels.
Carmakers have also benefited from a recovery in demand from the US, one of the biggest markets for luxury cars.
Audi’s sales jumped 13.5% in the US during the period, from a year ago, while Porsche saw a growth of 21%. Bentley deliveries in the US rose 28%.
China was the other major growth market for the firm, with both Audi and Porsche posting nearly 20% growth.
However, Bentley’s sales in China declined 3% from a year ago.
Porsche, Audi and Bentley have posted record sales in 2013 helped by new model launches and a recovery in the global car market
VW has set its sights on becoming the world’s biggest carmaker by 2018.
The latest figures are likely to provide a big boost to VW’s ambitions.
Overall, Audi sold 1.57 million cars and sport-utility vehicles globally last year, Porsche sold 162,145 vehicles and Bentley’s sales totaled 10,120 units.
“We set an important milestone for Audi in the past year: We achieved our intermediate strategic goal of 1.5 million deliveries two years earlier than planned, and in fact comfortably exceeded it,” Rupert Stadler, chairman of Audi, said in a statement.
“This means that in the past four years alone, Audi has attracted more than 600,000 new customers.”
The numbers by Volkswagen come at a time when the global car market has been recovering from the slump seen in the years after the global financial crisis.
Data released on Thursday showed that car sales in China – the world’s biggest car market – rose 14% in 2013, from a year ago. That compares to an annual growth rate of less than 5% seen in the previous two year.
According to the China Association of Automobile Manufacturers 21.98 million vehicles were sold in China last year.
Analysts also expect 2013 to be the best year for US auto market since 2007, with total annual sales expected to reach nearly 15.6 million units.
If that figure is met, it would mark a strong recovery from 2009 when sales fell to 10.4 million during the depths of the recession.
German carmaker Volkswagen says its group sales hit a record high last year despite slowing sales in Western Europe.
Volkswagen sold 9.07 million cars last year, up 11% from 2011.
Sales in North America and Asia-Pacific rose 26.2% and 23.3% respectively, helping to offset a 6.5% drop in sales in Western Europe, excluding Germany where sales were up 1.9%.
Volkswagen said it was optimistic for this year despite the economic problems in the eurozone.
“Tough challenges lie ahead. The Volkswagen Group has everything it takes to face these challenges and to play a leading role on world markets,” said Volkswagen chairman Dr. Martin Winterkorn.
However, sales at Volkswagen are still expected to lag those at rival Toyota, which has forecast a 22% jump in sales last year to 9.7 million vehicles.
German carmaker Volkswagen says its group sales hit a record high last year despite slowing sales in Western Europe
Toyota has not yet released its official global sales figures for 2012.
At Volkswagen, its passenger cars remained the most popular, recording sales of 5.7 million last year.
Sales of sports car Porsche, which Volkswagen took over last August, were 59,500 between August and December.
The economic turmoil in the eurozone, which has seen several countries including Greece, Portugal and the Republic of Ireland need international financial help, has hurt car sales in the region.
Last week, Peugeot Citroen reported worldwide sales down 16.5% for 2012, which it blamed on “the crisis affecting the European automobile market”.
Meanwhile, Honda revealed plans to cut 800 jobs at its Swindon plant which it also blamed on weak demand in European markets.
