German Lawyers Make Last Ditch Attempt To Save 'Volkswagen Laws'

by Ulrika Lomas, for LawAndTax-News.com, Brussels

20 March 2003

According to a report from the Legal Media Group news service, a group of German lawyers visited Brussels ahead of yesterday's European Commission meeting to attempt to persuade the EC not to take action against laws protecting leading German car manufacturer, Volkswagen from takeover.

The EC President, Romano Prodi delayed sending a letter of formal notice to the German government over the issue earlier this month, following fierce opposition from the French and German Commission members to the proposal. However, a decision over whether or not to caution the country's authorities was expected yesterday.

The disputed law effectively protects the car maker from takeover by capping the voting rights of shareholders at 20%. However, according to LMG, the law protecting Volkswagen is not exactly the same as those protecting so-called 'golden shares' owned in companies by the French and Portuguese governments, which were banned by the European Court last year.

'The key provisions of the Volkswagen laws do not discriminate in favour of the German government, because the law simply caps the voting rights of all Volkswagon shareholders at 20%,' the news service revealed.

The protection of German companies has become a key political issue in Germany since Vodafone's successful hostile takeover bid for Mannesman in 2000.

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