Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-03-12-Speech-1-194"
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"en.20070312.23.1-194"2
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"Mr President, ladies and gentlemen, I can wholeheartedly endorse what Mrs Berès has just said, for the subject matter of both oral questions is, in principle, quite similar.
Having now heard that the Commission is mulling over the idea of producing a recommendation on this subject, let me be quite frank in saying that I am less than enthusiastic about this, and that for two reasons, the first of which is that we, in this House, take an increasing sceptical view of recourse to this sort of ‘soft law’. Moreover, the Commission is also running the risk of this House adopting such a recommendation in the form of an own-initiative report, into which it would put something quite different to what the Commission, in its recommendation, has envisaged, and if that happens, the recommendation will be rendered worthless, for a recommendation is effective only if it can be taken as read that the legislator will be prepared, in subsequent proceedings, to support such a regulation, but if the legislator says ‘no’ to it, the recommendation is of no value.
The second reason is that I am not wholly clear in my own mind as to what such a recommendation would be meant to accomplish. In Article 10 of the Takeovers Directive, we laid down comprehensive rules on transparency according to which all enterprises have to set out openly all the existing obstacles to a takeover. Those transparency rules are stringent, and I wonder just what the recommendation is meant to achieve over and above that.
There is yet another reason for this question, and the wording of the Committee on Legal Affairs’ question alludes to it. We are of course interested to know what view the Commission takes of the development ushered in by the Advocate-General’s summing up in the Volkswagen case, when he, for the first time, had to deal, not with traditional golden shares, but with restrictions on voting and other rules, and he saw these as being contrary to the Treaty in much the same way as golden shares are. Do we actually need to legislate if the ECJ follows this ruling? Does it not mean that all obstacles fall away of themselves? It would be interesting to hear the Commission’s view of this.
The reason why the Takeovers Directive is the way it is is that the ‘one share – one vote’ principle does not exist in Europe, and that has to be spelled out plainly. Another reason why it is the way it is is that, back when the Takeovers Directive was being hammered out, it was not possible to secure the acceptance of the ‘one share, one vote’ principle. I was prepared to accept it at the time, but neither here in this House nor in the Council could the necessary majorities be found to support it.
I think that those who speak in public debate read too much into the report that the Commission has now put forward on the implementation of the Takeovers Directive, for the report, in fact, says nothing more or less than that the directive has, by and large, been properly implemented by the Member States, which have availed themselves of the option provided by it, which is precisely the intention behind the legislation.
Things will get interesting, though, only when the Commission does as the Takeovers Directive itself requires and, in 2011/2012, produces its first report on the use to which the Directive is put, for then we will have reached the point at which we will be able to arrive at conclusions as to whether what we have done with it – that is to say, setting a benchmark and leaving things to market forces – has or has not been successful, or whether it will then be necessary to consider further legislation, but that point will be reached only in 2011 or 2012, when we have the first definite report on the application of the directive; it has not been reached now.
I might add that we – by which I mean this House and the Council as legislator – laid down, by a large majority, certain things on a wide variety of issues currently under discussion, including, back then, the Takeovers Directive, insisting, for example, that the so-called ‘break-through rule’ – which is, of course, the decisive benchmark – should apply to all pre-bid and post-bid defences, although there would, of course, be certain exceptions to it.
We did not include those aspects that present no obstacles to takeovers, and we did this on the basis of simple accounting examples and the results of simple mathematical procedures, one of these being the so-called preference shares, which were exempted from the ‘breakthrough rule’ from the very outset. Why was this so? One reason why was that the owners of preference shares are paid more than are others; a second was that company law limits them to a maximum of 50% of capital, so that they can never, in fact, tie down more of the capital than can the actual ordinary shares, which carry with them an entitlement to vote.
It was for similar reasons that we, at that time, exempted French shares with double voting rights from the breakthrough rule, one reason for this being that these were not voting shares of a particular class, that might be said to be guaranteed in the long term, but rather intended to reward long-term investment, with these voting rights being converted, after a certain period of time, into normal voting rights; the second being that, with the breakthrough rule, the reaching of 75% – which is, as a rule, the quorum at which the breakthrough can kick in – no longer raises the issue as to whether the shares are double-vote or ordinary. If I hold them, I always have a majority in the general meeting. That is the reason why we made an exception for these voting rights.
We did, however, include multiple voting rights and limitations on voting rights in the breakthrough rule, since these are real obstacles to takeovers. Here, too, one finds the peculiar situation that there is a disparity between ownership on the one hand and control – that is to say, majority by number of votes – on the other, and we took the view that the application of the breakthrough rule to these would be justified in so far as companies or Member States avail themselves of this option.
I just want to reiterate something to which Mrs Berès has referred, namely that we, in the Szejna report, forcefully put forward the view that market forces should, in the first instance, be allowed free rein, so that we could see how this directive proved itself in practice, and that we would decide whether further steps were needed when the Commission, in 2011/2012, had brought out the first report."@en1
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