Opinion of the Advocate General — ECLI:EU:C:2008:463
Date: 2008-09-04
Language of the case: Spanish
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Spain

Summary of the Judgment 1. Freedom of movement for persons – Freedom of establishment – Companies – Directive 77/91 – Equal treatment of shareholders – Change in the capital of a public limited company – Shareholders’ right of pre-emption provided for in the event of an increase in capital by contributions in cash (Council Directive 77/91, Arts 29(1) and (4) and 42) 2. Freedom of movement for persons – Freedom of establishment – Companies – Directive 77/91 – Change in the capital of a public limited company – Shareholders’ right of pre-emption provided for in the event of an increase in capital by contributions in cash (Council Directive 77/91, Art. 29(1) and (6)) 3. Freedom of movement for persons – Freedom of establishment – Companies – Directive 77/91 – Change in the capital of a public limited company – Shareholders’ right of pre-emption provided for in the event of an increase in capital by contributions in cash (Council Directive 77/91, Art. 29(4) and (6)) 1. A Member State which maintains in force rules whereby the general meeting of shareholders of a listed company may freely determine the issue price of the new shares, when deciding on an increase in capital that entails the total or partial withdrawal of a right of pre‑emption, does not fail to fulfil its obligations under Article 42 of Second Directive 77/91 on company law, read in conjunction with Article 29(1) and (4) thereof, provided that the meeting has available to it a report for the director of the company and a report from an auditor appointed for that purpose, and provided that the issue price of the shares is higher than their net asset value as apparent from the auditor’s report. Although the right of pre-emption granted to shareholders does not admit of any exception other than that expressly laid down in Article 29(4) of the Second Directive, the fact remains that the Second Directive lays down minimum requirements for the protection of shareholders and creditors of public limited companies, by leaving the Member States free to adopt provisions that are more favourable to them, which provide, inter alia, for more restrictive conditions on withdrawing the right of pre‑emption. In addition, the fact that the issue price of the new shares may be set below their market value, in accordance with those rules, cannot be regarded as liable to lead to unequal treatment, for the purposes of Article 42 of the Second Directive, between existing and new shareholders, in the absence of evidence to show, as required under Article 42 of the directive, that both those categories of shareholders are in the same position, and must therefore be treated equally. Furthermore, to require that the issue price of new shares must not be below their market value would have the effect that, even if that price were justified by the directors’ report, the general meeting of shareholders could not apply it without infringing the principle of equal treatment referred to in Article 42 of the Second Directive. (see paras 26, 30-31, 33-34) 2. A Member State which grants a pre-emption right in respect of shares, in the event of an increase in capital by contributions in cash, not only to shareholders, but also to holders of bonds convertible into shares, and which grants a pre-emption right in respect of bonds convertible into shares, not only to shareholders, but also to the holders of bonds convertible into shares pertaining to earlier issues, fails to fulfil its obligations under Article 29(1) and (6) of Second Directive 77/91 on company law. As is apparent from the wording of Article 29(1) and (6), the new shares and the bonds convertible into shares are not to be offered to the shareholders and the bondholders simultaneously, but ‘on a pre-emptive basis’ to the shareholders. Thus, only in so far as the shareholders have not exercised their right of pre-emption can those shares and bonds be offered to other purchasers, including, in particular, the holders of convertible bonds. (see paras 39-40, 46, operative part 1) 3. A Member State which fails to provide that the general meeting of shareholders may decide to withdraw pre-emption rights in respect of bonds convertible into shares on an issue of such bonds fails to fulfil its obligations under Article 29(6) of Second Directive 77/91 on company law, read in conjunction with Article 29(4) thereof. Even though the Member States are free to adopt more restrictive conditions on withdrawal of the right of pre-emption at issue, the fact remains that Article 29(6) of the Second Directive, read in conjunction with Article 29(4) thereof, requires that, in certain circumstances, the general meeting of shareholders be able to decide to withdraw the right of pre-emption for all securities which are convertible into shares. National rules which make no express provision for the possibility of such withdrawal, even if they could be interpreted contrary to their wording, would not be likely to create a situation which is sufficiently precise, clear and transparent in order to allow individuals to know the full extent of their rights and rely on them before the national courts. (see paras 50-51, 55, 57, operative part 1)