Porsche eyeing total control of Volkswagen in wake of controversy
There has been much controversy regarding the "Volkswagen Law", which prevents foreign interests from taking control of Volkswagen. The law, passed in 1960 when Volkswagen was privatized by the German government, limits the voting rights of any VW shareholder to just 20%, regardless of the number of stocks each owns. The law is supposed to ensure the company’s stability, but is seen by many as effectively shielding the largest European carmaker from hostile takeovers.
With the advocate general deciding the law to be illegal for preventing the free flow of investments, it could just be a matter of months before the European Court of Justice, the EU’s highest court, scraps the law altogether. When that happens, Porsche could take full control of Volkswagen with 27.4% of its shares. The VW board has already authorized Porsche to buy up to 29.9% of the company and, together with the German state of Lower Saxony with 20.8%, could still prevent any foreign takeovers.
The controversy has become a scandal in Europe with stories of power-grabs, allegations of kickbacks and other acts of wrong doings by all parties involved. A decision by the full court this year can hopefully bring an end to all these.
Read more about the consequences of the VW controversy
