Wulff Expects Broad Approval

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Wulff Expects Broad Approval
Wulff Expects Broad Approval

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Christian Wulff is confident that a new VW law will meet with broad approval. Meanwhile, Porsche has filed an objection to the rejection of the amendment to the articles of association.

Lower Saxony's Prime Minister Christian Wulff (CDU) expects broad approval for a revised VW law. The state government is confident that an amended VW law in accordance with the draft of Federal Justice Minister Brigitte Zypries (SPD) will pass the federal cabinet, the Bundestag and the Bundesrat, said a government spokesman on Friday. At a meeting between Chancellor Angela Merkel (CDU) and the Union Prime Minister on Thursday evening in Berlin, the implementation of the ruling of the European Court of Justice (ECJ) on the VW law was discussed in great detail.

Decision will take time

The Prime Ministers of Baden-Württemberg and Bavaria, Günther Oettinger (CDU) and Günther Beckstein (CSU), as well as Federal Economics Minister Michael Glos (CSU) had spoken out against a revised VW law. VW major shareholder Porsche also rejects this. Government spokesman Ulrich Wilhelm said on Friday in Berlin that there are currently a number of talks. Therefore, the decision on a VW law will still take "a while".

Beckstein has meanwhile confirmed that he does not consider the draft to be approved. "We cannot make a law that is very likely to be objected to by the European Commission." However, he agreed that Bavaria would carefully examine a stripped-down version of the VW law. "We'll see if it has a positive impact on the Bavarian locations," said Beckstein. "If it is beneficial for Bavaria, then they will agree - if it does not help us, then regulatory policy has priority."

Part declared illegal

The European Court of Justice had declared important parts of the VW law to be illegal. The regulation was overturned, according to which a VW shareholder can exercise a maximum of 20 percent of the voting rights in the general meeting - even if he owns more shares in the company.

According to the Zypries draft, the employee representatives at VW and the state of Lower Saxony should continue to have important say in the future. So a 20 percent blocking minority should apply - this ensures the state of Lower Saxony, which holds just over 20 percent in VW, a strong position in the Wolfsburg car manufacturer. The country argues that the regulation corresponds to German company law.

Major shareholder Porsche, on the other hand, wants to limit the country's influence. However, the sports car manufacturer missed the necessary majority for an amendment to the statutes at the VW general meeting in Hamburg on Thursday. Thereafter, the blocking minority should be increased to 25 percent. Even a request by the country to retain the blocking minority did not achieve the necessary majority.

The status quo remains

This means that VW will initially stick to the status quo. The VW statutes also include maximum voting rights and the right of federal and state authorities to send two supervisory board members to the supervisory body as long as they own VW shares.

The motions to amend the statutes of both Porsche and Lower Saxony provided for these two points to be abolished in accordance with the ECJ ruling - but since both motions did not get through, the previous regulations remained. Lower Saxony had called on Porsche to jointly adopt amendments to the statutes on the right to post and the maximum voting right, but Porsche refused.

At Volkswagen, there is now a threat of a long legal tug-of-war in the fight for the future distribution of power. Porsche currently holds around 31 percent of VW and wants to take over the majority of the car manufacturer. Meanwhile, Porsche has set the course for a legal dispute. A Porsche spokesman said on Friday in Stuttgart that an objection was lodged against the rejection of the application at the VW general meeting to amend the statutes at Volkswagen. This gives the Stuttgart sports car maker four weeks to take legal action. With the application, Porsche wanted to limit the strong influence of the state of Lower Saxony on VW and increase the blocking minority from 20 to 25 percent.

The CDU member of the Bundestag Jochen-Konrad Fromme calls for the federal government to join VW. «In order to avert an impending, protracted wave of lawsuits, the federal government should be made responsible and not only amend the VW law, but also participate indirectly at VW. The state-owned KfW bank could acquire five percent of the stake - together with the 20 percent of the country would ensure that there is actually a public blocking minority,”said Fromme of the“Braunschweiger Zeitung”. A wave of processes is neither good for Porsche nor for VW. (dpa)

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