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Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

VIPsight is a dynamic photo archive, sorted by nations and dates, by and for those interested in CG from all over the world.

VIPsight offers, every month:
transparent and independent current information / comments / facts and figures on corporate governance locally and internationally,

  • written by local CG experts,
  • selected and structured by the Club of Florence,
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VIPsight International

Article Index



The Düsseldorf Bourse stands firm on the rules for delisting

Börse Düsseldorf is defending itself against the decision handed down by the German Federal Court on simplifying the rules for withdrawing from the stock market. Companies quoted in Düsseldorf will still in the future only be able to delist when a resolution has been passed by their shareholders’ meeting, and when they can present shareholders with a purchase offer in accordance with the law on share purchase and company acquisitions. The regulations on which the terms implemented by the majority of German stock exchanges are based do not lend legality to the protection of investors that stock exchange laws provides. As regards the Frosta ruling, the Federal Court (BGH) deems that delisting has no effect on the stock market price of a share. There was the recent case of a company announcing its intention of total delisting without there being any takeover bid. The upshot was a fall in the share price of 10% more or less. Furthermore, complains bourse management, BGH has deprived shareholders of any powers provided by private law to demand an audit of a joint stock company’s Board of Directors to delist. In October 2013 and as a spin-off of the Frosta ruling, BGH fundamentally overturned its case law on a company’s total delisting by distancing itself from the Macrotron case law in force since 2002 and instead espousing the concept according to which the resolution of the general meeting and pay back in cash were no longer required of share issuers.

The total number of objectors is on the wane

In 2013, more companies than ever shared their profits with their shareholders.

This year the general shareholders’ meeting agendas of an estimated 136 of the 160 DAX-, MDAX-, SDX-, and TecDAX-listed companies will propose distributing a dividend compared to the 128 companies in 2013. However, according to a survey conducted by FOM Hochschule, the figure of  37.3 thousand million Euros of profit  that German companies will distribute to shareholders this year is only slightly more than last year’s total. An increase of 0.1% is indeed modest . By contrast, this is the fourth year running that the number of companies distributing a dividend has increased. The actual dividend volume of the over 650 Prime, General and Entry Standard listed companies is only slightly lower than the record figure reached in 2008 of 38,4 thousand million Euros. There has been a fall of just under 3% of dividends distributed by the DAX30 companies, weighted by the cuts in Deutsche Telekom, RWE and E.ON. Telekom lost its primacy as queen of dividends to Siemens, but the real surprise was the record set by MDAX and TecDax alone. As the survey states, 2014 reflects the upswing in optimism felt in the economic climate and in the stock market.


Dividends in 2014: who is paying most

136 of the 58 Dax, MDax, SDax and  TecDax-listed companies are planning on distributing profits to shareholders in 2014 – total payouts come to roughly 37 thousand million Euros. This is the conclusion reached by a survey conducted by the Deutsches Institut für Portfolio-Strategien and the Schutzvereinigung für Wertpapierbesitz. Munich Re leads the pack with 7.25 Euros per share followed by Rational (6 Euros) and Allianz (5,30). The category of highest increase is headed by Xing (539 %), with MAN a distant second (207%) and Deutsche Wohnen in third place with 62%. All told, companies are paying out more than ever whereas there has been a marked turndown in  earnings.

The Biotech industry has run aground

In a recent report, Ernst & Young indicate that there was a 7% dip in turnover in the Biotech business in 2013 to some one thousand million Euros in 2013. Expenditure for R & D is also lower (- 6%).

Despite the 325 million Euros in funding that the biotechnology industry had available – an increase of 10% over 2012 – the state of funding is fraught with difficulties. Today’s figure seems a drop in the ocean compared to the 500 million Euros per year that were budgeted in the years before the crisis. The pinch is felt most in the area of research into active ingredients. Granted, German researchers have invented several technologies and substances appreciated all over the world, but the risk capital collected by German manufacturers is, on average at most 1.4 million dollars, against a figure 70% higher in the USA.

The research team involved point out that biotechnology will continuing to grow worldwide with a turnover forecast for 2020 of some 515 thousand million Euros. In 2010 it was still only 92 thousand million. If Germany is to stay in the running, it will have to foster investing in the sector of biotechnology and one way of doing that would be to grant capital gains tax exemption to private investors.