Europe’s top court turned down the European Commission’s bid to abolish its “VW law” and Germany won the right to retain key veto power at carmaker Volkswagen AG.
The Luxembourg-based EU Court of Justice said in a ruling on Tuesday that Germany had complied with a 2007 court ruling ordering it to water down a 1960 law that gave Lower Saxony a de facto golden share in Europe’s biggest carmaker.
Under German financial market rules, shareholders need at least 25% to hold a blocking minority, but the VW law gave Lower Saxony, with just 20% in the carmaker, this prerogative.
After the 2007 ruling, Germany scrapped elements of the law but kept untouched the right of any shareholder with a 20% stake to veto strategic decisions. That prompted the Commission to pursue Germany again, on the grounds of protectionism.
The EU Court of Justice said on Tuesday that “Germany complied in full with the initial judgment of the court delivered in 2007″ and found its amendments to the original law had been sufficient.
The ruling means Germany avoids fines worth tens of millions of euros and leaves the regional state of Lower Saxony, where Volkswagen is headquartered, with the power to block takeovers and other key decisions such as factory closures.
) - Tuesday, October 22nd, 2013 - filed under Industry
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