Press Release: Company law: Commission asks Spain to end discrimination against shareholders

The European Commission decided on 14 December 2004 to formally ask the Spanish Government to amend national rules which enabled discrimination against shareholders by listed companies when they issue new shares and convertible bonds. The Commission believed this discriminatory treatment was an infringement of the principle of equal treatment of shareholders and of the 'pre-emption' rights accorded to shareholders under the Second Company Law Directive (Article 42 and Article 29 respectively). Pre-emption rights aim to encourage investment by providing a guarantee that existing shareholders will have the first opportunity to buy newly issued shares. The European Commission's request took the form of a reasoned opinion, the second stage of the infringement procedure laid down in Article 226 of the Treaty.