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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



Capital News


AUDI AG: Fall cleaning II

The Munich II public prosecutor issued an administrative order against AUDI AG in its capacity as affected party (Betroffene) pursuant to sections 30 para. 1, 130 para. 1 of the German Act on Regulatory Offences (Ordnungswidrigkeitengesetz - OWiG) in the context of deviations from regulatory requirements in certain V6 and V8 diesel aggregates and diesel vehicles manufactured or distributed by AUDI AG. The administrative order provides for a fine of EUR 800 million in total, consisting of the maximum penalty as legally provided for of EUR 5 million for negligent regulatory offences and the disgorgement of economic benefits (Abschöpfung wirtschaftlicher Vorteile) in the amount of EUR 795 million. As a result of the administrative order imposing the fine, the active regulatory offence proceedings conducted by the Munich II public prosecutor against AUDI AG will be finally terminated.

AUDI AG accepted the fine and it will not lodge an appeal against it. By doing so, Audi AG admits its responsibility for the deviations from regulatory requirements.


Thyssenkrupp AG: Split into two companies planned

The supervisory board of thyssenkrupp AG unanimously agreed to the managing director´s plan to divide the group into two separate companies via a spin-off.

According to the plan, the industrial goods (“thyssenkrupp Industrials”) and the materials (“thyssenkrupp Materials”) businesses shall be managed as independent, listed companies with direct access to the capital markets each. thyssenkrupp Industrials operates as a pure capital goods business and will consist of three units (elevator business, automotive supplier business and core plant construction). The remaining activities of the group will be concentrated at thyssenkrupp Materials, comprising the steel and stainless steel production including the 50 percent holding in the future steel joint venture, materials trading and steel-related processing.

The two new entities will be of comparable size. Based on pro forma data for fiscal 2016/17, thyssenkrupp Industrials would generate sales of around 16 bn Euro, while thyssenkrupp Materials would have sales of approximately 18 bn Euro.

The split has to be decided at an AGM, which could take place approximately 12 – 18 months from now.


BMW AG: Substantial investments planned in China

BMW announced the intention to raise its holding in the joint venture with its Chinese partner Brilliance China Automotive Holdings, BMW Brilliance Automotive from 50 percent to 75 percent. Both partners signed a corresponding agreement, which still is subject to the approval of the relevant authorities and the consent of Brilliance China Automotive Holdings.

At the same time, the joint venture announced an investment of more than three billion Euro in new and existing plant structures over the coming years, thus increasing the production capacity to 650.000 units from the early 2020s.

The importance of China is indicated by sales of around 560.000 BMW-cars in 2017. Two thirds of all BMW vehicles sold in China last year were produced at the joint venture.

In light of the American-Chinese trade war, it is interesting to note that this is the first ever such move by a global car maker as China begins to relax ownership rules for its market. The relevance of this step for the shareholders of Brilliance China Automotive Holdings was underpinned by an approximately 30 percent share price decline following the announcement of the initiative.


STADA Arzneimittel AG: Time to say goodbye

Nidda Healthcare, a company controlled by Bain Capital and Cinven Partners, published an offer document for the public delisting tender offer for all shares of STADA Arzneimittel AG. The four-week acceptance period will end on November 8th, 2018.

Nidda Healthcare offers a cash consideration of 81.73 Euro per STADA share. This price equals the weighted average domestic stock exchange price of STADA shares during the last six months prior to the announcement of the decision to make a public delisting tender offer. The cash consideration represents a premium of approximately 23.5 percent on the offer price of 66.25 Euro per STADA share during the takeover offer in 2017, and a premium of 10 percent on the cash compensation of 74.40 Euro offered to minority shareholders in the context of the domination and profit and loss transfer agreement.


CECONOMY AG: Profit warning alarms shareholders

In a capital market news release dated October 8th, 2018 CECONOMY warned that based on preliminary figures the 2017/18 EBITDA is expected in the region of 630m Euro, well below last years´ 714m Euro (before special items), while the EBIT would amount to approximately 400m Euro (prior year: 494m Euro before special items). These numbers are well below the data published just three weeks earlier in another prior profit warning published on September 18th, 2018.

CECONOMY did not provide concrete background information about the reasons for the substantial deviation from the first profit warning except for a hint that it is attributable to MediaMarktSaturn Retail Group. But this does not explain why such an amount could evaporate from the earnings expectations within such a short period of time. The lack of appropriate information resulted in speculations that the company may have miscalculated rebates it expected from suppliers, resulting in a sharp decline of the share price.

In an extraordinary meeting held on October 13th, 2018, the supervisory board and the CEP Peter Haas decided to part ways “by mutual consent” with immediate effect. Based on an understanding with the supervisory board, the CFO Mark Freese shall remain in office until the appointment of his successor and an “amicable revocation” of his employment contract has been found. The chairman of the supervisory board, Jürgen Fitschen, added in a statement, that “we are firmly convinced that this is the only way for CECONOMY to restore the trust that has been lost on the capital market.”

Unfortunately, even with the third statement in a row CECONOMY missed the chance to inform shareholders about what really happened and why the CEO left the company with immediate effect, although no replacement seems to be in sight. Full financial disclosure for the past fiscal year 2017/18 shall be published on December 19th, 2018.