In a judgement rendered on October 23, 2007, the Court of Justice of the European Communities (CJEC) condemned Germany to revise the "Volkswagen" law which divides powers between shareholders within the auto group. This text, which represents a barrier against a takeover bid, was judged as contrary to the free movement of capitals. The CJEC did not accept Germany's justification that this was to protect workers' interest. (Ref. 070877)
Calling upon the principle of the free movement of capitals, the European Commission was opposed to the “Volkswagen” law (see our article No. 070137) on the following points: 1/ the fact that voting rights are capped at 20% of the social capital when a shareholder exceeds this percentage; 2/ the requirement of a majority of over 80% for the adoption of agreements which, according to the German law on limited companies requires only a majority of 75%; 3/ allowing the Federal State and the Land of Lower Saxony each to appoint two representatives to the company’s supervisory board.
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