Two former top executives at sports carmaker Porsche are set to go on trial Thursday in Stuttgart, Germany, on charges of market manipulation over their role in a failed takeover of Volkswagen (VW) in 2008, according to reports.

Prosecutors allege that former CEO Wendelin Wiedeking and former CFO Holger Haerter misled investors by denying a plan to take control of the much larger VW. Both men deny wrongdoing. If found guilty however, they may be fined or sentenced up to five years in jail, Bloomberg reported

The trial comes as VW, Porsche’s largest shareholder, faces massive penalties, global recalls and lawsuits over “defeat devices” that falsified emissions data in its diesel engine vehicles.

Plaintiffs in civil suits are seeking as much as 5 billion euros ($5.7 billion) in damages from Porsche, the Bloomberg report said. However, Porsche spokesman Frank Gaube said the allegations were unfounded.

Porsche’s ill-fated bid to buy VW

The trouble started seven years ago in Oct. 2008, when under Wiedeking, Porsche issued a statement saying that the company held 74.1 percent of VW and was seeking to acquire a 75 percent stake and control of the company. However, Porsche had allegedly secretly built up the stake in VW, using intermediaries to build up a controlling position.

The announcement caused VW’s stock to jump as short sellers raced to buy shares to repay borrowed stock in bets that VW would fall. As VW’s stock went up, profits from the manipulations soon exceeded Porsche's profits from carmaking, an unprecedented event in German business history, according to reports. 

However, in the fall of 2008, during the global financial crisis, banks refused Porsche further funds, drying up loans that Wiedeking and Haerter needed to finance the deal. The deal fell apart and VW ended up having to rescue Porsche, leaving behind only a holding company with the sports carmaker’s iconic name.

Porsche is still associated to the case as a related party and if the former executives are found guilty, it could have to forfeit any financial gains from the increased price of Volkswagen shares in 2008, Bloomberg said.