Legal Challenges
In 2003 the UK government's golden share in BAA, the UK airports authority, was ruled illegal by European courts, deemed contradictory to the principle of free circulation of capital within the European Union. But taking in account the implications of this decision—especially the transitional state in countries which are candidates to join the Union—it allowed provisions to use golden shares in strategically important areas.
Other golden shares ruled illegal include the Spanish government's golden shares in Telefonica, Repsol YPF, Endesa, Argentaria and Tabacalera.
The Golden Share structure of Volkswagen AG and the travails of the German Land (Federal State) of Niedersachsen (Lower Saxony) are discussed by Johannes Adolff, Turn of the Tide? The 'Golden Share' Judgments of the European Court of Justice and Liberalization of the European Capital Markets, available in the German Law Journal as well as Peer Zumbansen and Daniel Saam, The ECJ, Volkswagen and European Corporate Law: Reshaping the European Varieties of Capitalism, CLPE Research Paper 30/2007, (also published in 7 German Law Journal 1027 )
The European Court of Justice also held that Portugal's holding of golden shares in Energias de Portugal is contrary to European Union law since it presented an unjustified restriction on free movement of capital.
Read more about this topic: Golden Share
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