Spain Abolishes Shareholding Law.

The Spanish government said Friday it had abolished a law that required companies seeking significant shareholding in previously state-owned companies to obtain its approval first.

In response to pressure from the European Commission, the government said it would no longer use the "golden share" mechanism allowing it to veto the sale of stakes of 10 percent or more in these companies.

Although the Spanish government over the last 10 years has sold its entire stake in most of the companies privatized, it retained a golden share in some on the justification that these companies controlled strategic assets.

The measure was announced by Deputy Prime Minister Maria Teresa Fernandez de la Vega at a news conference after the government's weekly Cabinet meeting.

Spain's telecommunications giant Telefonica SA, energy companies Repsol YPF and Endesa SA and the country's top airline Iberia - all privatized during the 1980s and 1990s - until Friday had golden shares owned by the government.

[Source: Forbes on line, 25nov05]

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