Lehne takes lead on takeover law

Date: 27/03/03

PLANS to give MEPs responsible for economic issues more say over scrutiny of the takeover directive will not affect the most controversial aspects of the draft law, according to the rapporteur on the issue.

Klaus-Heiner Lehne told this paper that the Parliament's legal affairs committee would continue to hold the reins over such scrutiny.

He predicts that suggestions by Chris Huhne, his counterpart on the economic and monetary affairs committee (EMAC), aimed at tackling the thorny issue of multiple voting rights, would not see the light of day.

Lehne, a German Christian Democrat, was speaking after Parliament leaders agreed two weeks ago to grant EMAC extra powers of scrutiny over the law, previously the sole domain of the legal affairs committee.

He said his proposals to set a level playing field for company takeovers would take precedence over Huhne's because they are "clearly an issue of company law", which was the remit of his legal affairs committee.

He claimed that EMAC, chaired by German socialist Christa Randzio-Plath, would only take the lead in issues concerning insurance and banking.

On the substance of the draft law, Lehne favours phasing out privileges granted to holders of shares with special voting rights by 2010.

However, he said he was "open" to a longer time frame stretching "until 2015 or 2020".

Special voting rights are seen by many as a barrier to takeovers because they allow a small number of shareholders the power to block hostile bids.

The Commission originally balked at calls from company law experts for a ban because its legal service warned that shareholders would go to court to keep their rights.

However, Lehne said Frits Bolkestein, the internal market commissioner, along with "a majority" of member states supported a phase-out.

Chris Huhne told European Voice last week that he prefers a system that would "grandfather" existing special voting rights in order toavoid the question of compensation if those rights are taken away.

But Lehne, who engineered the Parliament's rejection of an earlier proposal on takeovers, described grandfathering as "unrealistic".

Plans to give MEPs responsible for economic issues more say over scrutiny of the takeover directive will not affect the most controversial aspects of the draft law, according to Rapporteur Klaus-Heiner Lehne.