The European Court of Justice has ruled that an Italian decree that restricts voting rights of foreign holdings in Italian utilities is illegal under EU law.
The decision follows the imposition of a 2% voting rights limit imposed on foreign interests in the wake of the 2001 liberalisation of the nation’s gas and electricity industries. The ruling only applied to dominant state-owned companies which were not listed on the stock exchange and was aimed at Electricité de France, which it was felt guarded its own national market while acquiring a large stake in the Italian market.
The European Commission brought the case against Italy on the grounds that it hampered the free movement of capital in the EU and the court said in a statement: “The suspension of voting rights prevents investors from participating effectively in the management of undertakings and is not justified on overriding public-interest grounds.”
