Huge New Fine Would Start If Germany Failed To Comply Again
VW was the subject or more legal action, but this one, a revival of the European Union’s action to end the golden share veto, might cause the company to sweat a little more than Suzuki’s.
The European Commission doesn’t think Germany implemented its previous decision in 2008 to overturn the “VW law”, which allows Lower Saxony’s 20 per cent voting rights to overpower the rest.
The Commission wants the European Court of Justice to fine Germany €31,114 a day since the date of the original decision in 2007, which adds up to about €46 million. An additional fine of €282,725 a day would apply for future delays, starting when the next ruling takes place.
The law dates back to 1960 and gives Lower Saxony and unions influence over VW factory closure decisions and takeover bids. The E.U says rules like this restrict the free flow of capital in Europe.
Deutsch Bank didn’t think this would have much impact on VW.
UBS Investment Research thought that revival of action on the blocking rule, which it said has now been cut to 15 per cent from 20 per cent, would revive interest in VW as a potential takeover target.
Neil Winton – December 1, 2011