Brussels cracks down on golden shares
Thursday 29 July 1999
Brussels intends to send Britain a "reasoned opinion" in September arguing that the 15 per cent ceiling on any individual shareholding in BAA breaches European Union law governing the free movement of capital.
The Commission yesterday went one stage further with the French government, saying it was taking France to the European Court of Justice to force it to surrender its golden share in the oil company Elf Aquitaine, currently subject to a hostile takeover bid by TotalFina.
The move by Mario Monti, the European Commissioner for the Single Market, represents the latest attempt by Brussels to dismantle safeguards designed to protect national interests. Proceedings were also opened against Italy, Portugal, Belgium and Spain for alleged infringements of EU laws. An Commission statement claimed that Spain had used its powers illegally to control ownership of some of its biggest companies, including Repsol, Telefonica, Endesa, Argentaria and Tabacalera.
The UK government's golden share in BAA has existed since privatisation in 1987. As well as limiting any single shareholder to 15 per cent, it also enables the Government to veto the sale of any of its three regulated airports - Heathrow, Gatwick and Stansted.
A spokesman for the Department of Environment, Transport and the Regions said it had received a letter from the Commission recently and was considering its implications.
BAA said that the matter was largely one for the Government to handle.
However, a spokeswoman pointed out that Britain's airport industry was already open, whereas many airports in Europe remained wholly government- owned.
Brussels has taken action in the past to force Britain to raise the thresholds on foreign shareholdings in Rolls-Royce and British Aerospace, where the Government also has special shares. The ceiling is now 29.5 per cent.
The Government holds golden shares in 14 companies, including Cable & Wireless, British Gas and electricity companies such as National Power, PowerGen and National Grid.
Mr Monti's spokeswoman said that the Commission had to take other matters such as security and legitimate public interest into consideration when deciding whether to challenge the use of golden shares.
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