Overview

Garrigues reports that a plan to scrap Spanish listed companies’ power to cap the voting rights of shareholders has ruffled feathers in the local business community.

On 17 June 2010, following a rough and eventful passage through Parliament, the Lower
House of the Spanish Parliament finally approved a substantive amendment to Spanish corporations law (to article 105.2) affecting listed corporations: a prohibition on voting ceilings for a shareholder (or companies in the same group), regardless of the
number of shares they own.

The amendment means Spanish law moves away from the flexibility displayed to date and is closer aligned with the small number of European countries - Germany and Italy most notably - that prohibit voting ceilings in the bylaws of listed companies. The amendment relates only to listed companies, echoing with Germany and Italy. Unlisted companies will still be allowed to have ceilings of this type.

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