Police in Germany are investigating a possible industrial espionage case involving Volkswagen spying on Porsche CEO Wendelin Wiedeking. According to German media, VW personal used a baby-phone hidden behind a sofa located in a hotel room Wiedeking was staying in during a trip for a VW supervisory board meeting.

Germany’s Der Spiegel was first to break the news and has reported that Porsche’s union boss, Uwe Hueck, also had his phone tapped and was talking to police. Local Police authorities have since confirmed they are investigating the case after a formal complaint was made by Porsche.

The allegations come as Porsche is about to increase its stake in VW beyond the current 31% to a majority holding. Standing in Porsche’s way is the German state of Lower Saxony, which still holds a 20% stake in VW. All three parties are currently locked in a battle over plans to change a rule under which "significant decisions" would require the approval of more than 80% of shareholders.