Rights with which takeovers can be impaired or blocked which currently exist in the legal systems of

Certain member states. In Germany, the Volkswagen Act is now expected to come under closer

scrutiny. This regulation caps the voting power of any shareholder in Volkswagen AG at 20%,

Regardless of the number of shares held. The German state of Lower Saxony, holding a share of

close to 20%, has, by virtue of the Act and its complicated rules on proxy voting, a de facto majority

Of votes present at the annual general meeting. The EU Court has been quite clear in its reasoning

That the objectives justifying an overriding interest of a member state must be of a public, general

Interest and that economic interests cannot constitute a valid justification for restrictions on the

Fundamental freedom of movement of capital. Whether the Volkswagen Act will stand up against

Such concerns remains to be seen, but it appears that the State might find it difficult to argue

PUblic reasons for an interest that is obviously, albeit for good historical grounds, an economic one.

ExamFocus

E

51 In the writer's view, the main reason the proposed French law was not

Approved was because

A it could not truly guarantee that petroleum products would always be

Available.

B the objective was not justified, and the proposed measures cannot be

Considered necessary.

C it ultimately served to increase the power of the petroleum companies.

D the provisions were excessive, giving the government too much influence

Over the company.

According to the writer, the foremost reason why the Court rejected the

Portuguese scheme is that

A it placed unfair constraints on investment by other Europeans.

B it enabled citizens of other member states to purchase shares.

C it led to investors discriminating against shareholders from other states.

D there were no sound economic reasons for it.

53 What does the phrase such concerns refer to in the third last line?

A the German government's valid historical reasons for maintaining a

Controlling share of Volkswagen AG

B the Court's insistence on objective criteria for justifying continued

Governmental control

C the Court's position that a member state can only retain control over a

Company if it is in the public interest

D the interest of the government of Lower Saxony in preventing unwanted

Takeovers of key industries

54 What is the main point made by the writer in the sixth paragraph?

A Economic interests are a valid justification for restrictions on the free

Movement of capital throughout the European Union.

B The Court rulings may also be applied to shareholders' rights issues related

To takeovers in other EU countries.

C The Volkswagen Act will most likely be upheld due to the overriding public

Interest.

D The Court is certain to strike down similar schemes in other member states,

Such as Germany.

Writing

The Test of Writing consists of two parts, which are weighted differently. Part 1

receives 40% of the marks, and Part 2, which requires a longer answer, carries 60%.

Part 1

What you have to do

Date: 2015-12-11; view: 940