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APG blasts extension of voting rights in French shareholder law

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APG, the €424bn Dutch asset manager, has criticised French shareholder legislation that grants double voting rights to investors that hold a stake in a company for more than two years.

It argued that limiting double voting rights to registered shares, as stipulated in the Florange Act, placed an entire group of shareholders – including institutional investors with long-term horizons – at a disadvantage against larger stakeholders.

APG, asset manager for €373bn civil service pension fund ABP, made its objections public soon after the French government indicated that it aimed to increase its stake in Air France-KLM from 15.88% to 17.58%.

The Dutch manager said it strongly supported the principle of one-share/one-vote, “as these voting rights match a shareowner’s economic interest in a company’’.

“Granting extra rights for voting or receiving dividend to specific shareholders differentiates between investors with the same economic interest,’’ it said.

“Such control-enhancing mechanisms lead to distortion between share ownership and voting rights, and provide powerful tools to keep or gain control of companies at low costs, and sometimes at the expense of minority shareholders.’’

APG said it would support the proposal to opt out of the double voting rights – tabled by the executive board of Air France-KLM – during the company’s AGM on 21 May.

The asset manager has a 0.1% stake in the airline.

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