EU Court Adviser: Revamped VW Law Is Acceptable

Germany's revisions to the so-called "VW Law" have complied with the terms of a 2007 ruling by the European Court of Justice, according to a senior court adviser.

The controversial German law protects Volkswagen AG from a hostile takeover or other shareholder-led changes by giving blocking power to the government of Lower Saxony. The state maintains a stake of just over 20% of the company.

Advocate General Nils Wahl says the ECJ should reject the European Commission's request that the court to levy heavy fines on Germany for allegedly infringing EU law by restricting the free flow of capital.

The Luxembourg-based court, which is expected to issue its ruling in the next few months, usually follows the advocate general's non-binding recommendations.

In response to the earlier ECJ decision, Germany scrapped a provision in the VW Law that capped any other shareholder's voting rights at 20%. But it retained a rule that requires 80% shareholder approval of any major decision.