When describing the Spanish government’s legislative push this spring to remove a popular takeover defense mechanism, many people use the word tejemaneje, a melodious term for backroom political or financial scheming. So little is understood about the government’s motive for what is seen by many as an illogical move that Spaniards are left to feast on rumors: The most popular speculation is that the proposal is a favor to a few important companies. One unhappy lawmaker calls it an attempt at “privatizing parliament.”
In early April the economic committee of the lower house of parliament approved an amendment that will eliminate company bylaws that limit a shareholder’s voting rights to a maximum percentage of votes no matter how much stock the shareholder owns. The option is designed to protect minority shareholders, but it is also used to stave off hostile buyers. The final vote on the amendment is expected before the summer. If successful, the motion will take effect mid-2011.
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