Golden share reflects badly on Portugal

Analysis of the concept of 'golden shares' in corporate governance rules in Europe, in the context of the decision by the Portuguese government, June 2010 to use its golden shares in Portugal Telecom to block a bid from Spain's Telefónica.

In the judgement of the 8 July 2010 of Case C-171/08
Commission v Portugal, the European Court of Justice said that the Portuguese State’s holding of ‘golden’ shares in Portugal Telecom constituted an unjustified restriction on the free movement of capital. Those golden shares grant the Portuguese State influence over decision-making in the company which is liable to discourage investments from operators in other Member States.

BBC News, 8.7.10: Portugal ruling revives Vivo bid http://news.bbc.co.uk/1/hi/business/10551530.stm

ECJ: Press Release, No.74, 2010: Judgment of the Court of Justice in Case C-171/08 Commission v Portugal http://curia.europa.eu/jcms/upload/docs/application/pdf/2010-07/cp100074en.pdf

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