Followup: Volkswagen Law upheld; Porsche blocked from buying VWby Paul Rachwal
The controversial Volkswagen Law was voted on by the German cabinet, which upheld shareholder the state of Lower Saxony's right to veto any major decisions regarding Germany's biggest automaker. Lower Saxony owns just over 20 percent of VW, which is enough to make executive decisions under the rules.
While Porsche owns about 31 percent of VW, it wants to increase its shares to over 50 percent, although there is little point, as Lower Saxony, which wants to keep local jobs, is unlikely to sell any of its shares, and controlling VW's future.
Late last year, the European Court of Justice revoked the so called "VW Law," which capped a shareholder's vote to just 20 percent, no matter the holder's invested interest. VW Law was enacted in the 1950s as a way to prevent a hostile takeover.