GLG News by Mr. Peter Dehnen, President
GLG News is now G+ Insights
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March 30, 2009
Original title: Business confidence hits 18-year low in Germany | www.ft.com
Business confidence in Germany is at an all-time low. The business climate index, as surveyed by the Munich-based Ifo Institute, has reached the lowest result measured since the survey began in 1991. Even worse is that, according to Ifo’s president Hans W. Sinn, the bottom of the downturn has not yet been reached. That’s the bad part of the news. Here comes the good news: Although the part of the survey which measures current conditions continues to decline, the part of the survey measuring optimism for the next six months has increased steadily since the beginning of the year.
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German banking consolidation through partial nationalization?
January 21, 2009
“Germany uses crisis to push banking consolidation” | www.ft.com
Germany has been the most active in promoting consolidation in both the commercial banking industry as well as in the state banking sector. In concrete examples, the German government has acquired a 25 % direct stake in Commerzbank to ensure that its merger with Dresdner Bank will go ahead as planned and has recently given a helping hand to Deutsche Bank in its bid to acquire a large stake in Postbank to beef up Deutsche Bank's domestic retail franchise. The consolidation of the already state-owned sector of Landesbanken and Sparkassen is the bigger challenge. The government will have to persuade the different Landesbanken of the German Federal States and also the mutual savings banks (Sparkassen) to accept consolidation.
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Germany’s VW Law brought to ECJ again
September 11, 2008
EU's McCreevy wants Germany facing court over VW law | www.cnbc.com
EU Internal Market Commissioner Charlie McCreevy announced that he wants to take Germany to the European Court of Justice (ECJ) since in his view, Germany has failed to amend the so-called “VW Law” properly and in line with European legislation. The ECJ held last year that the VW law was in breach of European rules on the free flow of capital across borders within the EU. The German car maker Porsche, which is Volkswagen’s major shareholder, currently owning 30 %, has already won permission from the European Commission (EC) to acquire control of VW and is about to do this step by step within the next few months. The German state of Lower Saxony, VW's second-largest shareholder with just slightly over 20 % of the ordinary shares, wants to keep its stake and the blocking minority provided by the VW Law.
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Siemens Damage Claim is unprecedented
July 31, 2008
Article: Siemens to claim money from ex-chiefs | www.ft.com
Siemens announced that the Supervisory Board has approved recommendations of its law firm to claim damages from executive board members in charge between 2003 and 2006. It will be the first time in German history that a chief executive of a company listed on the German blue-chip stock index DAX has been sued for damages by his former employer.
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European Commission postpones decision on Porsche-VW issue
July 8, 2008
EU verschiebt Entscheidung zu Porsche/VW | www.ftd.de
Porsche recently purchased shares outright corresponding to a 4.92 % share of VW’s common stock. The European Commission announced the postponement, of its decision in regard to the request submitted by Porsche for approval of its planned shareholding. Meanwhile, in order to ensure that its share of VW remains at the important mark of 20%, Lower Saxony recently purchased 500,000 additional VW shares. In a 2007 decision, the ECJ struck down various provisions of the so-called “VW Law” which contained a minority blocking provision as well as a voting rights cap to protect the interests of the German State of Lower Saxony. In reaction to the ECJ’s decision, the German Ministry of Justice drafted a “new” VW Law which retained the 20 % blocking minority provision of the old law based on Lower Saxony’s interpretation of the ECJ ruling.
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March 27, 2008
Fighting returns to VW over Porsche's stake | www.ft.com
Volkswagen’s two major shareholders – Porsche and the State of Lower Saxony - are on course for a showdown at the company’s upcoming annual general meeting (AGM) to be held on 24 April 2008. Porsche’s fight with Lower Saxony stems from the so-called “VW law,” parts of which were struck down last year by the European Court of Justice (ECJ).
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Germany seeks to protect its companies against foreign government funds
February 28, 2008
Financial Times Deutschland: EU plant Kodex für Staatsfonds | www.ftd.de
More than USD 42 billion was invested by foreign government investors in Germany in 2007 and more than 2.2 million German employees work for companies owned by non-resident government and private funds. In regard to foreign investment funds, a German draft bill would allow the German government to prohibit the acquisition of a stake greater than 25% in a company located in Germany by a non-resident investor. Although the draft bill aims primarily at government-owned funds, the law would equally apply to any investor, whether privately or publicly owned, in order to allow blockage of controlling foreign interests in German companies. The President of the European Commission, Jose Manuel Barroso, has argued for a “European approach”, which need not automatically mean a European law, but which should avoid national solo attempts at restrictions.
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Porsche Seeks Full Control of Volkswagen
December 14, 2007
Porsche to Wait until Holidays End to Take Over Volkswagen | www.nytimes.com
The Porsche AG founded a new corporate entity in the legal form of a Societas Europaea (SE), the Porsche Automobil Holding SE, which got registered in November. According to Porsche CEO Wendelin Wiedeking the registration of the Porsche Automobil Holding SE was a prerequisite for Porsche to enhance the stake in Volkswagen. Another hurdle taken…
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Comeback: Leo Kirch Back on Track
December 11, 2007
Kirch back on the ball with rights deal | search.ft.com
Leo Kirch, whose media group collapsed in 2002 in Germany’s then largest bankruptcy, has made a surprising comeback. The media entrepreneur bought the rights to German league soccer on October 9, thereby guaranteeing higher revenues for the league’s various clubs. The deal with Kirch was reportedly controversial among soccer clubs because his empire’s collapse led to significant financial difficulties for some of them.
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Transrapid Floats Toward Munich
December 7, 2007
Germany moves toward building high-speed maglev line from Munich to airport | www.iht.com
The Transrapid railway system is an ambitious business project with high potential. Unfortunately the German developers were not able to see their modern train run in Germany or Europe as the concept was exported to China and the first track was build to link Shanghai with its airport. Now the high tech train system is coming to Germany.
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Siemens Fined in Bribery Scandal
December 7, 2007
Bribery scandal: Siemens fined 201 million euros | www.heise.de
The Siemens group is currently manoeuvring in troubled waters as the bribery scandal finally starts to enter the courtrooms in Germany and abroad. But the payment charges against Siemens are not limited to fines for the punishable misconduct or neglect. The figures for levies on illegally made profits and tax arrears resulting from the unlawful booking of the payments in question have the potential to exceed the regular fines by far and in the first case to be decided the actual fine was comparatively negligible. Nevertheless, the management seems to be prepared to cope with the big figures of (expected) fines, reimbursements and back duties.
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October 18, 2007
Auflösung passiver Ausgleichsposten bei Organschaft | www.sis-verlag.de
This article discusses a remarkable judgment by the highest German tax court. With its decision from February 7, 2007, the Supreme Tax Court contradicted the tax authority’s long standing approach and stated that the regulation contained in section R 63(3) of the Corporate Tax Guidelines (Körperschaftsteuerrichtlinien; hereinafter “KStR”) is no longer applicable. Tax payers will be glad to rely on this decision in case the tax authorities tend to follow their old (and now outdated) rules.
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October 5, 2007
Kein Abzug von Schuldzinsen aus Darlehen zur Refinanzierung einer GmbH-Beteiligung nach deren Veräußerung | vershp.invedaweb.de
The heading of this article is phrased as if there where no deduction of interest payments on loans used to finance the acquisition of shares possible under German jurisdiction. But that is not the full story. As it is often the case when it comes to German tax law, things appear to be tricky. That is also true in the case discussed in the article. It has to be admitted that there is a restriction on such but nevertheless under certain conditions interest payments on loans used to finance the acquisition of shares are deductible even after the shares moved into another corporation. This analysis discusses the courts ruling and identifies the necessary conditions.
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EON moves into Russian electricity market
September 6, 2007
E.ON forms JV for Russian electricity market | www.speroforum.com
EON, Germany’s biggest power producer, has set up a joint venture in Siberia with Russian energy group STS which will assist the company in its goal of building up a strong position in one of Europe’s largest and fastest growing markets. Both partners own a 50 % stake in the new company with the name EON-STS Energia. This analysis provides background information on risks and chances of the announced enterprise.
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German Corporate Tax: payout of the tax credit modified
August 22, 2007
Schicksal des Koerperschaftssteuer-Guthabens nach SEStEG | www.ulm.ihk24.de
This analysis provides an inside view on new aspects of the German tax law that might be of interest even for taxpayers not resident in Germany. Although the corporate tax system has been changed from the tax credit method to the half-income system in 2000/2001, many corporations have tax credits resulting from the old system. These enterprises should be aware of the modification of section 37 (4) Corporate Tax Code, which allows the payout of the tax credit, starting 2008.
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DaimlerChrysler - are the divorced companies heading for a fresh start?
August 17, 2007
Daimler pays to dump Chrysler | money.cnn.com
“A marriage made in heaven” – that’s what the merger between Daimler and Chrysler was once called. Today we can read about their divorce and how they are looking around for potential new partners. This analysis gives a rough overview and comments on the future of the enterprise.
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Federal Tax Court on the taxation of compensation payments
August 15, 2007
Bundesfinanzhof: Zur Abfindungszahlung für den Verzicht auf einen zugesagten Arbeitsplatz | www.iww.de
This analysis provides an inside view on new aspects of the German tax law that might be of interest even for taxpayers not resident in Germany. The taxation of compensation payments for example again was the subject of a case decided by the Federal Tax Court.
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Siemens names new CEO – and still faces great challenges
August 13, 2007
Siemens AG Sunday named Merck & Co. Inc.'s Peter Löscher as its new president and CEO in an effort to break with recent scandals that have plagued the company. | www.central-it.de
As the company struggles to improve an image tarnished by corruption the supervisory board of the German engineering conglomerate Siemens AG announced on May 20 already that it has tapped Peter Loescher as its new CEO. The announcement ended weeks of uncertainty over who would take over leadership of the company amid investigations in Europe and the United States into allegations that employees set up secret funds to pay off union leaders and bribe officials to win contracts.
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Business tax reform: German Bundestag passes bill
August 8, 2007
Business tax reform 2008: Making Germany attractive for business | www.bundeskanzlerin.de
The German government has been discussing necessary measures for a business tax reform for months. In February 2007 a draft was published summarizing the planned amendments. A lively discussion regarding the proposed changes ended in an amended draft which passed the Bundestag (Lower House of Parliament) on May 25, 2007. This analysis gives a summary of the most important measures of this bill which will become effective on January 1, 2008.
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Porsche bids for Volkswagen but has no intentions
August 7, 2007
Porsche's public takeover bid for VW fails | auto.blogiezt.com
Porsche made an offer to buy the shares which it does not already own in Volkswagen AG at a price lower than the current stock exchange rate. This offer has not been successful – and Porsche is pleased with this result. This analysis shows, why that is.
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