Short-term or short-changed?

Long-term owners only, please

A BATTLE over voting rights, pitting the state against company boards and many investors, is raging among French companies. The biggest fight of all involves Renault, a carmaker with global ambitions. According to the so-called Florange law adopted in 2014, after March 2016 listed French firms must begin granting double voting rights to investors who have held registered shares for at least two years—unless two-thirds of shareholders have voted against this rule. The provision aims to counter “short-termism” by encouraging more loyalty between investors and companies. It will also, fortuitously, allow a government intent on selling down some of its stakes in domestic companies to retain its influence over them while banking the cash.

Renault’s outraged boss, Carlos Ghosn, is particularly worried that suddenly doubling the voting clout of the state will upset its Japanese partner, Nissan, which holds 15% of Renault’s capital but no voting rights. The government, determined to defeat the board’s resolution to retain one vote for one share, has temporarily raised its stake from 15% to 19.7% in...

via Business Feeds

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