A European court’s decision to abolish the so-called “Volkswagen law” is the latest wave of corporate governance reform sweeping Germany
After three years, the European Commission finally succeeded in October in abolishing the “Volkswagen law”. The law capped the voting rights of a single investor in the German carmaker at 20 per cent and meant that all decisions needed a near-unanimous 80 per cent approval from shareholders. In its ruling, the European Court of Justice agreed with the commission that the law unduly restricted the rights of investors and the free movement of capital on the continent. It also paved the way for Porsche to use its 31 per cent stake in Volkswagen to take control of the company.
The fact that Porsche has more power over Volkswagen changes little for other German investors – Volkswagen was the only German company to put a ceiling on voting rights. But it is another major step in changes to Germany’s traditional, corporatist model of governance that have seen power shift from federal governments and trade unions to individual shareholders.
See full Article.
Posts
