State to retain protective power at Volkswagen
The state of Lower Saxony, where Volkswagen is based, will be able to retain its veto over important company decisions, according to government sourcesBerlin -- The German government has decided to amend the law governing Volkswagen (VW) in a way that will retain a provision to protect Europe's largest carmaker from takeover, according to information from government sources on Thursday.
The information confirmed an earlier report in the tabloid newspaper "Bild" to the effect that the state of Lower Saxony, where VW has its headquarters, would retain its veto over key company decisions.
In October last year, the European Court of Justice struck down the 48-year-old "Volkswagen law" as German luxury carmaker Porsche was moving to seize a majority stake in the company.
Analysts saw the news as a blow to the aims of Porsche boss Wendelin Wiedeking to take sole control and chart a new and more aggressive course for VW.
VW's shares fell by more than 3 percent on the news.
According to the government sources, Lower Saxony's government will continue to hold a blocking minority of 20 percent. In general a stake of 25 percent is required in other German companies.
The cabinet is to decide on Tuesday on the new law drafted by the Justice Ministry.
Porsche currently holds just under 30 percent of the voting rights at VW, while Lower Saxony has 20.1 percent.