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European Union regulators decided Wednesday to take Britain to Europe’s highest court, the European Court of Justice, over its so-called golden share in the country’s largest airport operator, British Airports’ Authority. Golden shares are small equity stakes retained by several European governments in state-owned companies after privatization. Golden shares carry unique powers, such as special voting rights. When BAA was privatized in 1997, the government inserted a provision in the company’s articles of association that gives the Secretary of State for Transport a golden share. With that share, the government can limit any one shareholder from controlling more than 15 percent of BAA. The European Commission, the EU’s executive agency and merger clearinghouse, said it acted against the U.K. because golden shares “constitute unjustified restrictions to the free movement of capital and the right of establishment within the Internal market.” BAA, the world’s largest airport operator, owns and operates seven U.K. airports, including three of London’s four airports: Heathrow, Gatwick and Stansted. In the U.S., it manages the retail operations of the Pittsburgh and Newark, N.J., airports, and hopes to bid for New York’s La Guardia and John F. Kennedy International airports when they are privatized. The commission is also involved in legal actions against Spain, Portugal, Belgium and France for similar reasons. The EU recently won its battle against Italy, after the Luxembourg-based ECJ ruled that the government’s golden share in energy group Eni SpA and Telecom Italia SpA ran afoul of EU law. The commission’s actions against golden shares sparked a wider debate earlier this year when Energy and Transport Commissioner Loyola de Palacio, one of the agency’s vice presidents, called for a review of the EU’s underlying legislation before continuing with action against individual member states. The review is expected next month, and the commission is preparing a paper to clarify its policy. Copyright (c)2000 TDD, LLC. All rights reserved.

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