Volkswagen Act
The Volkswagen Law is a controversial German law regulating the ownership of Volkswagen AG.
Law
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 state of Lower Saxony had a share of 20.2 percent, which gave it the ability to veto major decisions and prevent takeovers by other businesses. It also allowed the government of Lower Saxony to appoint two members of Volkswagen's board.
Challenges
In October 2007, the European Court of Justice ruled that the VW law was illegal[1] because it was protectionist. At that time, Porsche held 31% of VW shares - although a smaller proportion of voting rights, due to the Volkswagen Law - and there had been speculation that Porsche would be interested in taking over VW if the law did not stand in its way. The court also prevented the government appointing Volkswagen board members.[2]
In 2008, the German government then rewrote the Volkswagen law, attempting to sidestep the ECJ judgement; 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.[3] European regulators took the German government to court again[4][5] 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.[6]
Volkswagen took over Porsche in July 2012.[7]
External links
References
- ^ "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' - Report". 4-Traders. 21 March 2012. Retrieved 17 February 2013.
- ^ "Volkswagen agrees to buy rest of Porsche for $5.6bn". BBC News. 05 July 2012. Retrieved 17 February 2013.
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