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Privatized corporations and golden shares
versus the free movement of capitals

Contact Bocconi University for this project

Federico Ghezzi
Full Professor of Commercial Law
Department of Legal Studies
Bocconi University
Via Gobbi 5, 20136 Milan, Italy

Bocconi University

The creation of a level playing field for corporations and investors across Europe might clash with protectionist interests of the States. In this perspective, to what extent the State might reserve to itself special powers in privatized corporations through golden shares or other similar devices is a central issue, tapping into the problem of the existence of a single market for corporate control in Europe. Recent case law of the ECJ has taken an increasingly strict attitude toward golden shares and other deviations from general corporate law adopted to ensure to the State-shareholder a position of prominence. Many States, on the other hand, have responded to the ECJ decision adopting specific rules concerning the position of the State as a shareholder. The research will analyse the recent developments of this issue in a comparative perspective and consider its economic implications.

Some of the open questions are:
- to what extent can national European legislatures introduce special rules to grant to the State, or to other shareholders, special powers different from the ones that might be granted using general corporate law?
- what are the most common controlling enhancing mechanisms (CEMs) that can be introduced according to general corporate law and that might create a disproportionate power within the corporation?
- are these CEMs legitimate under European law?

Relevance to future of European societies
The theme affects issues such as free movement of capital, the creation of a common European market for corporate control and the ability of the Member States to invest in private corporation (or privatize state-owned ones) retaining specific powers. Even without considering its broader implications on corporate law, it will contribute to shape the European corporate ownership structure.
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