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Volkswagen Act

January 01, 1970

The Volkswagen Act is a set of German (originally West German) federal laws enacted in 1960, regulating the privatization of Volkswagenwerk GmbH into the Volkswagen Group.[1] In order to maintain government control in the privately owned company, it stipulated that the votes in major shareholder meeting resolutions require 4/5th (80%) agreement.[2] This part of the law was deemed to violate the "free movement of capital" principle of European Union corporate law.[3] After a series of challenges from 2007 to 2013, the German parliament finally amended the part in 2013 to EU Court of Justice satisfaction.[4]

Law edit

The full title of the law is "Gesetz über die Überführung der Anteilsrechte an der Volkswagenwerk Gesellschaft mit beschränkter Haftung in private Hand", usually abbreviated to "VW-Gesetz". It was enacted on 28 July 1960, when Volkswagenwerk GmbH was privatized. The government of the German state Lower Saxony held a voting share of 20.2 percent, which gave it the ability to veto major decisions and prevent takeovers by other shareholders, regardless of the extent of the ownership.[5] It also allowed the government of Lower Saxony to appoint two members to the Volkswagen Group's board of directors.

Challenges and the EU court ruling edit

In October 2007, the European Court of Justice ruled that the VW law was illegal because of its protectionist nature. At that time, the Porsche SE holding company held 30.9% of VW Group shares and there had been speculation that Porsche SE would be interested in buying all shares if the law did not stand in its way. The Court of Justice also prevented the government appointing Volkswagen board members.[6][7]

In 2008, the German government then rewrote the Volkswagen law, attempting to sidestep the ECJ judgment; removing restrictions on share ownership but still requiring an 80% majority for important decisions, so Lower Saxony would still be able to block major business decisions and takeovers.[8] European Commission regulators took the German government to court again[9][10] and requested a fine of €31,114 per day backdated to when the law was declared illegal in 2007, plus larger ongoing fines from the date of a second court judgment. In March 2012, the German government insisted that it would defend the Volkswagen Law in court.[11]

In October 2013, the EU Court of Justice ruled that the redraft of the Volkswagen law “complied in full” with Union law, bringing "the matter to a close,” as Chantal Hughes, spokeswoman for EU Internal Markets Commissioner Michel Barnier said.[5][12]

Outcome edit

During the above developments, the Porsche SE holding company, which traditionally had close relationships with Volkswagen, increased its holding of Volkswagen Group's shares as follows:

Porsche SE holding shares in Volkswagen Group
Oct 2005 Nov 2006 Mar 2007 Sep 2008 Jan 2009
18.53%[13] 27.4%[14] 30.9%[14] 35.79% 50.76%[15]

Porsche had many difficulties financing the large investment, and agreed in August 2009 to sell its automobile manufacturing business to Volkswagen Group,[16] while retaining the majority ownership in Volkswagen Group. Porsche SE officially became the controlling owner of Volkswagen Group when the 'Volkswagen Law' was amended to abolish the 20% owner veto rights in 2013, with 50.76% ownership.[12]

References edit

  1. ^ "Gesetz über die Überführung der Anteilsrechte an der Volkswagenwerk Gesellschaft mit beschränkter Haftung in private Hand". Bundesministerium der Justiz und für Verbraucherschutz.
  2. ^ § 4, Abs.3 of the above referenced law.
  3. ^ F. Sander. "Case C-112/05, European Commission v. Federal Republic of Germany The Volkswagen Case and Art. 56 EC". Columbia Journal of European Law (2008). 14: 359–370.
  4. ^ "Germany has complied with Volkswagen law ruling". Retrieved 2014-07-28.
  5. ^ a b Barker, Alex (2013-10-22). "Germany keeps right to veto VW takeovers". Financial Times. Retrieved 2021-12-05.
  6. ^ "THE VOLKSWAGEN LAW RESTRICTS THE FREE MOVEMENT OF CAPITAL" (PDF). COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES. 23 October 2007. Retrieved 17 February 2013.
  7. ^ "'Volkswagen law' is ruled illegal". BBC. 23 October 2007. Retrieved 17 February 2013.
  8. ^ "EU To Sue Germany Again Over 'Volkswagen Law'". Wall Street Journal. 24 November 2011. Retrieved 17 February 2013.
  9. ^ Ramsey (27 November 2011). "Germany in court again over "VW Law," could face fines of nearly $375,000/day". Autoblog. Retrieved 17 February 2013.
  10. ^ "Germany sued for second time over 'Volkswagen law'". The Parliament. 25 November 2011. Retrieved 17 February 2013.
  11. ^ "Volkswagen AG : Germany To Aggressively Defend Volkswagen Law". 4-Traders. 21 March 2012. Retrieved 17 February 2013.
  12. ^ a b "Germany Wins EU Court Battle Over VW Law". Bloomberg. 22 October 2013. Retrieved 5 February 2014.
  13. ^ "Porsche Seeks to Acquire Share in Volkswagen". 2005-09-27.
  14. ^ a b Häcker, Joachim. "VW Porsche case study" (PDF).
  15. ^ "VW Gains as Porsche Refinancing Boosts Expectations (Update1)". Bloomberg. 26 March 2009. Retrieved 9 June 2014.
  16. ^ Connolly, Kate. "Volkswagen and Porsche to merge". The Guardian.

External links edit

  • Text of the law, in German

Further reading edit

  • A. Endell: Volkswagen im Angebot – VW-Gesetz bietet keinen Schutz vor feindlichen Übernahmen, in: Neue Zeitschrift für Gesellschaftsrecht 2000, S. 1160–1161
  • W. Kilian: VW-Gesetz und Wissenschaftsförderung, in: Neue Juristische Wochenschrift 2002, S. 3599–3601
  • H. Krause: Von „goldenen Aktien“, dem VW-Gesetz und der Übernahmerichtlinie, in: Neue Juristische Wochenschrift 2002, S. 2747–2752
  • R. Ruge: Goldene Aktien und EG-Recht, in: EuZW 2002, S. 421–424
  • St. Grundmann, F. Möslein: Die goldene Aktie, in: Zeitschrift für Unternehmens- und Gesellschaftsrecht 2003, S. 317–366
  • C. Armbrüster: „Golden Shares“ und die Grundfreiheiten des EG-Vertrages, in: JuS 2003, S. 224 ff.
  • F. Sander: Volkswagen vor dem EuGH – Der Schutzbereich der Kapitalverkehrsfreiheit am Scheideweg, Europäische Zeitschrift für Wirtschaftsrecht (EuZW) 2005, S. 106–109.
  • M. Pießkalla: Goldene Aktien aus EG-rechtlicher Sicht, Dissertation, Verlag Dr. Kovac, Hamburg 2006, ISBN 3-8300-2307-3.
  • N. Reich: Kurzbesprechung der Schlussanträge von Generalanwalt Dámaso Ruiz-Colomer v. 13. Februar 2007 in der Rs. C-112/05 - Kommission/Bundesrepublik Deutschland betreffend das VW-Gesetz (VWG), in: EuZW 2007, S. 132 ff.
  • W. Kilian, Vereinbarkeit des VW-Gesetzes mit Europarecht, in: Neue Juristische Wochenschrift 2007, S. 3469 ff.
  • F. Sander: Höchststimmrechte und Kapitalverkehrsfreiheit nach der VW-Gesetz-Entscheidung – Psychologisiert der EuGH den Schutzbereich des Art. 56 EG?, Europäische Zeitschrift für Wirtschaftsrecht (EuZW) 2008, S. 33.
  • A. Kömpf: Staatseinfluss auf die Volkswagen AG: Grenzen der staatlichen Einflussnahme auf Wirtschaftsunternehmen in Privatrechtsform, Dissertation, Verlag Peter Lang, Frankfurt 2010, ISBN 978-3-631-59321-9.
  • Ulrich Seibert: Der Übernahmekampf Porsche/VW und das Schwarze-Peter-Spiel um das VW-Gesetz, Die Aktiengesellschaft, 2013, S. 904 ff.

January 01, 1970
volkswagen, german, originally, west, german, federal, laws, enacted, 1960, regulating, privatization, volkswagenwerk, gmbh, into, volkswagen, group, order, maintain, government, control, privately, owned, company, stipulated, that, votes, major, shareholder, . The Volkswagen Act is a set of German originally West German federal laws enacted in 1960 regulating the privatization of Volkswagenwerk GmbH into the Volkswagen Group 1 In order to maintain government control in the privately owned company it stipulated that the votes in major shareholder meeting resolutions require 4 5th 80 agreement 2 This part of the law was deemed to violate the free movement of capital principle of European Union corporate law 3 After a series of challenges from 2007 to 2013 the German parliament finally amended the part in 2013 to EU Court of Justice satisfaction 4 Contents 1 Law 2 Challenges and the EU court ruling 3 Outcome 4 References 5 External links 6 Further readingLaw editThe full title of the law is Gesetz uber die Uberfuhrung der Anteilsrechte an der Volkswagenwerk Gesellschaft mit beschrankter Haftung in private Hand usually abbreviated to VW Gesetz It was enacted on 28 July 1960 when Volkswagenwerk GmbH was privatized The government of the German state Lower Saxony held a voting share of 20 2 percent which gave it the ability to veto major decisions and prevent takeovers by other shareholders regardless of the extent of the ownership 5 It also allowed the government of Lower Saxony to appoint two members to the Volkswagen Group s board of directors Challenges and the EU court ruling editIn October 2007 the European Court of Justice ruled that the VW law was illegal because of its protectionist nature At that time the Porsche SE holding company held 30 9 of VW Group shares and there had been speculation that Porsche SE would be interested in buying all shares if the law did not stand in its way The Court of Justice also prevented the government appointing Volkswagen board members 6 7 In 2008 the German government then rewrote the Volkswagen law attempting to sidestep the ECJ judgment removing restrictions on share ownership but still requiring an 80 majority for important decisions so Lower Saxony would still be able to block major business decisions and takeovers 8 European Commission regulators took the German government to court again 9 10 and requested a fine of 31 114 per day backdated to when the law was declared illegal in 2007 plus larger ongoing fines from the date of a second court judgment In March 2012 the German government insisted that it would defend the Volkswagen Law in court 11 In October 2013 the EU Court of Justice ruled that the redraft of the Volkswagen law complied in full with Union law bringing the matter to a close as Chantal Hughes spokeswoman for EU Internal Markets Commissioner Michel Barnier said 5 12 Outcome editDuring the above developments the Porsche SE holding company which traditionally had close relationships with Volkswagen increased its holding of Volkswagen Group s shares as follows Porsche SE holding shares in Volkswagen Group Oct 2005 Nov 2006 Mar 2007 Sep 2008 Jan 2009 18 53 13 27 4 14 30 9 14 35 79 50 76 15 Porsche had many difficulties financing the large investment and agreed in August 2009 to sell its automobile manufacturing business to Volkswagen Group 16 while retaining the majority ownership in Volkswagen Group Porsche SE officially became the controlling owner of Volkswagen Group when the Volkswagen Law was amended to abolish the 20 owner veto rights in 2013 with 50 76 ownership 12 References edit Gesetz uber die Uberfuhrung der Anteilsrechte an der Volkswagenwerk Gesellschaft mit beschrankter Haftung in private Hand Bundesministerium der Justiz und fur Verbraucherschutz 4 Abs 3 of the above referenced law F Sander Case C 112 05 European Commission v Federal Republic of Germany The Volkswagen Case and Art 56 EC Columbia Journal of European Law 2008 14 359 370 Germany has complied with Volkswagen law ruling Retrieved 2014 07 28 a b Barker Alex 2013 10 22 Germany keeps right to veto VW takeovers Financial Times Retrieved 2021 12 05 THE VOLKSWAGEN LAW RESTRICTS THE FREE MOVEMENT OF CAPITAL PDF COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES 23 October 2007 Retrieved 17 February 2013 Volkswagen law is ruled illegal BBC 23 October 2007 Retrieved 17 February 2013 EU To Sue Germany Again Over Volkswagen Law Wall Street Journal 24 November 2011 Retrieved 17 February 2013 Ramsey 27 November 2011 Germany in court again over VW Law could face fines of nearly 375 000 day Autoblog Retrieved 17 February 2013 Germany sued for second time over Volkswagen law The Parliament 25 November 2011 Retrieved 17 February 2013 Volkswagen AG Germany To Aggressively Defend Volkswagen Law 4 Traders 21 March 2012 Retrieved 17 February 2013 a b Germany Wins EU Court Battle Over VW Law Bloomberg 22 October 2013 Retrieved 5 February 2014 Porsche Seeks to Acquire Share in Volkswagen 2005 09 27 a b Hacker Joachim VW Porsche case study PDF VW Gains as Porsche Refinancing Boosts Expectations Update1 Bloomberg 26 March 2009 Retrieved 9 June 2014 Connolly Kate Volkswagen and Porsche to merge The Guardian External links editText of the law in GermanFurther reading editA Endell Volkswagen im Angebot VW Gesetz bietet keinen Schutz vor feindlichen Ubernahmen in Neue Zeitschrift fur Gesellschaftsrecht 2000 S 1160 1161 W Kilian VW Gesetz und Wissenschaftsforderung in Neue Juristische Wochenschrift 2002 S 3599 3601 H Krause Von goldenen Aktien dem VW Gesetz und der Ubernahmerichtlinie in Neue Juristische Wochenschrift 2002 S 2747 2752 R Ruge Goldene Aktien und EG Recht in EuZW 2002 S 421 424 St Grundmann F Moslein Die goldene Aktie in Zeitschrift fur Unternehmens und Gesellschaftsrecht 2003 S 317 366 C Armbruster Golden Shares und die Grundfreiheiten des EG Vertrages in JuS 2003 S 224 ff F Sander Volkswagen vor dem EuGH Der Schutzbereich der Kapitalverkehrsfreiheit am Scheideweg Europaische Zeitschrift fur Wirtschaftsrecht EuZW 2005 S 106 109 M Piesskalla Goldene Aktien aus EG rechtlicher Sicht Dissertation Verlag Dr Kovac Hamburg 2006 ISBN 3 8300 2307 3 N Reich Kurzbesprechung der Schlussantrage von Generalanwalt Damaso Ruiz Colomer v 13 Februar 2007 in der Rs C 112 05 Kommission Bundesrepublik Deutschland betreffend das VW Gesetz VWG in EuZW 2007 S 132 ff W Kilian Vereinbarkeit des VW Gesetzes mit Europarecht in Neue Juristische Wochenschrift 2007 S 3469 ff F Sander Hochststimmrechte und Kapitalverkehrsfreiheit nach der VW Gesetz Entscheidung Psychologisiert der EuGH den Schutzbereich des Art 56 EG Europaische Zeitschrift fur Wirtschaftsrecht EuZW 2008 S 33 A Kompf Staatseinfluss auf die Volkswagen AG Grenzen der staatlichen Einflussnahme auf Wirtschaftsunternehmen in Privatrechtsform Dissertation Verlag Peter Lang Frankfurt 2010 ISBN 978 3 631 59321 9 Ulrich Seibert Der Ubernahmekampf Porsche VW und das Schwarze Peter Spiel um das VW Gesetz Die Aktiengesellschaft 2013 S 904 ff Retrieved from https en wikipedia org w index php title Volkswagen Act amp oldid 1101028387, wikipedia, wiki, book, books, library,

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