ANNOUNCEMENT 05 Oct 2009

In October 2009, the government of Germany announced altered domestic business conditions for foreign investors.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Hypo Real Estate Group Press Release, HRE General Meeting passes resolution on the squeeze-out of minority shareholders, October 5, 2009:
http://www.hyporealestate.com/uploads/media/PI-aO_Hauptversammlung_englisch_Endfassung.pdf
Hypo Real Estate Group Press Release, Transfer of minority shareholders' shares comes into effect, October 13, 2009:
http://www.hyporealestate.com/uploads/media/0910uebertragungsbeschluss_final_e_01.pdf
Financial Market Stabilization Supplementary Act (Gesetz zur weiteren Stabilisierung des Finanzmarktes, Finanzmarktstabilisierungserg?nzungsgesetz) published in the German Official Journal on April 8, 2009 (Bundesgesetzblatt Jahrgang 2009 Teil I Nr 18, ausgegeben zu Bonn am 8. April 2009):
http://www.bgbl.de/Xaver/start.xav?startbk=Bundesanzeiger_BGBl&bk=Bundesanzeiger_BGBl&start=//*%5B@attr_id=%27bgbl109s0725.pdf%27%5D#__Bundesanzeiger_BGBl__%2F%2F*%5B%40attr_id%3D'bgbl109s0725.pdf'%5D__1371807981478 (pages 725 to 733)


Inception date: 13 Oct 2009 | Removal date: open ended
Still in force

FDI: Treatment and operations, nes

On October 5, 2009, the General Meeting of the German bank Hypo Real Estate passed a resolution that involuntarily forced minority shareholders, some of them foreign, to sell. The bank was partly nationalised after the 2008 financial crisis through capital injection and the German state, through its Financial Markets Stabilisation Fund, then expressed its willingness to take full control of the bank by becoming the sole shareholder. However, the government had to deal with the refusal of some minority shareholders, among them the American private equity investor JC Flowers. JC Flowers bought a 25 percent stake of Hypo Real Estate at 22.50 EUR per share in June 2008, that refused to sell out at a market price that had fallen below 2 EUR in winter 2009. That is why Germany had to pass a law authorising the government to expropriate shareholders of banks (against compensation at the market price): the Financial Market Stabilization Supplementary Act (Finanzmarktstabilisierungsergänzungsgesetz in German) especially designed to expropriate JC Flowers from Hypo Real Estate was definitively passed on April 7, 2009.
The expropriation of minority shareholders came into effect on October 13, 2009 after that the Regional Court of Munich entered it into the Commercial Register.
The Financial Markets Stabilisation Fund bought the remaining shares for 1.30 EUR each.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A