Brussels, 20/07/2005 (Agence Europe) - The European Commission has launched infringement proceedings against five Member States. It will refer Spain to the European Court of Justice over its national legislation which enables discrimination against shareholders by listed companies when they issue new shares and convertible bonds. According to Article 159 of the Spanish law on public limited liability companies, when a listed company increases its capital by issuing new shares to cash buyers, it can refuse the “pre-emption” right of existing shareholders. The same shares can subsequently be sold to other parties at a substantial discount from their market value. As a result, the holdings of existing shareholders may be unduly “diluted” (reduced as a proportion of the company's total shares), because shares may be offered to other parties at a discount, without existing shareholders having had a chance to buy them. Spanish law confers on existing holders of convertible bonds pre-emption rights on newly issued shares or on newly issued convertible bonds.
The European Commission has decided to send a letter of formal notice asking Sweden for a full explanation of the measures it has taken to implement fully the European Court of Justice's judgement (Case C-116/04, 18 November 2004) requiring Sweden to write the Directive 2001/17/EC on the reorganisation and winding-up of insurance undertakings (“the Winding Up Directive”) into national law. According to the provisions of the “Winding Up Directive”, where an insurance undertaking with branches in other Member State fails, the winding up process must be subject to a single bankruptcy proceeding initiated in the Member State where it has its registered office. The Directive is designed to guarantee protection of policyholders in such instances. The European Commission has decided to send a letter of formal notice asking Luxembourg for a full explanation of the measures it has taken to implement fully the European Court of Justice's judgement (Case C 450/03, 9 September 2004) requiring Luxembourg to write into national law Directive 1998/44/EC on the legal protection of biotechnological inventions. The Directive should have been written into national law by 30 July 2000. It aims to clarify certain principles of patent law applied to biotechnological inventions whilst ensuring that strict ethical rules are respected. To date, four Member States have failed to implement the Directive: Italy, Luxembourg, Latvia and Lithuania.
A reasoned opinion has been sent to Ireland in respect of Irish rules, which exclude - regardless of the circumstances - payment of any compensation from the Irish Insurance Bureau to drivers of vehicles if all vehicles involved in a collision are uninsured. This means that payment of compensation will automatically be ruled out for blameless drivers of uninsured vehicles. In the Commission's view, the Irish rule is contrary to the principles contained in the Second Motor Insurance Directive 84/5/EEC (Article 1 (4)).
A supplementary reasoned opinion has been sent to Greece with regard to Greek rules imposing mandatory membership of the Greek National Association of Insurers for all undertakings providing motor insurance services in Greece. In the Commission's view, this mandatory membership is contrary to the rules of the Non-Life Insurance Directives (Directives 73/239/EEC, 88/357/EEC, 92/49/EEC), which established the principle of home member state control in relation to insurance undertakings. Moreover, the Commission takes the view that the mandatory membership restricts the fundamental principles of freedom of establishment and free provision of services. On reasoned opinion was already sent to Greece on this issue in October 2004.