EN Official Journal of the European Union CE 88/16

(2004/C 88 E/0015)

WRITTEN QUESTION E-0824/03

by Paul Rübig (PPE-DE) to the Commission

(18 March 2003)

Subject: Restrictions on the transfer of securities in the Czech Republic

Even though investors in the south Bohemian energy supply company JÈP exercise all their shareholders' rights for a significant proportion of their stake, the shares are owned by the municipalities in southern Bohemia. The reason is that, under the JÈP statutes, the transfer of shares is restricted (transfers can be made only between municipalities and state funds). Investors may acquire rights only in respect of the acquisition of shares, dividends, etc. Shareholders' requests for an amendment to the statutes abolishing these restrictions on transfers have been consistently rejected by the Czech state (following the privatisation of RWE). Similar applications have been approved by the state for almost all the other Czech gas and electricity distribution companies (there were also ‘municipality shares’ in the case of the electricity companies).

Owing to the restrictions on selling, the holders of JÈP shares (the municipalities) are not in a position to dispose freely of their shares. Does this not represent discrimination against the shareholders and hence a contravention of EU rules?

Is the fact that some investors are placed at a disadvantage compatible with the investment protection provisions of the European energy charter, which has also been ratified in the Czech Republic, and with the spirit of energy market liberalisation, which provides ‘inter alia’ for the equal treatment of market participants?

In view of the dominant position of RWE in the Czech natural gas sector, this situation appears counterproductive. How does the Commission assess this situation on the Czech natural gas market, which is a significant market for Europe?

Answer given by Verheugen on behalf of the Commission

(6 May 2003)

The situation described in the question of the Honourable Member should not be considered as a discrimination linked to the nationality of the shareholders of Jiho Ceska Plynarenska (JCP), the south Bohemian energy supply company. Two German companies, RWE and EON are apparently among the largest JPC shareholders. It appears that Czech municipalities are also major shareholders in the capital of this company and have a controlling stake (34 percent). It would appear that municipalities hold JCP shares which are not legally tradable, which is not the case for the other JCP shares held by other investors.

Community legislation requires shares of companies which are traded on an official stock exchange listing to be freely negotiable (Article 46(1) of Directive 2001/34/EC of the Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on the information to be published on those securities (1)). However, paragraph 3 of the said Article authorises an approval clause under the condition that it does not distort the market.

JCP is listed on the Czech Stock Exchange. To the extent that the shares held by the Czech municipalities are of a different category and not admitted to the official list on the Czech Stock Exchange, this practice is not incompatible with Community law. Only in the case of shares which are listed and for which a restriction of selling clause could not be assimilated to an approval clause, as explained above, any potential contradiction with Community legislation would need to be verified.

The Commission is in contact with the Czech Authorities to ensure that the relevant ‘acquis’ is fully complied with.

It should be noted that the Czech Republic has obtained a Transition Period, within the framework of the Accession Negotiations, concerning liberalisation of the gas market until the end of 2004 and this is set down in the Accession Treaty.

The investment provisions of the European Energy Charter Treaty concern only the requirements with respect to investors from another Contracting Party. For established investments, there is a requirement that such investments of an investor from any other Contracting Party be treated no less favourably than the established investments of an investor from the Contracting Party in question (‘national treatment’). For the ‘Making of Investments’, however, which appears to be the case in question, there is only a ‘best endeavours’ requirement to give such ‘national treatment’.

The award to RWE of the privatisation tender in the gas sector was concluded after clearance by the Czech Competition Office, which is responsible under the Europe Agreement currently in force. As stated in the 2002 Regular Report (2), the Commission believes that the privatisation process has helped to prepare the Czech gas sector for the competitive internal energy market.

(1) OJ L 184, 6.7.2001.

(2) COM(2002) 700 final.