«(Company law – Directive 77/91/EEC – Alteration of capital of a bank constituted in the form of a public limited liability company – Direct effect of Articles 25(1) and 29(3) of the directive – Abuse of rights)»

Freedom of movement for persons – Freedom of establishment – Companies – Directive 77/91 – Scope – Inclusion of banks constituted in the form of public limited liability companies – National rules providing for an increase by administrative measure of the capital of a bank which is in financial difficulties – Not permissible – Prevention, by recourse to a national rule prohibiting the abuse of rights, of the exercise of rights conferred on shareholders by the directive – Not permissible – Obligation to give notice in writing to the holders of registered shares in the event of an increase in capital – Information limited to publication of the invitation to subscribe in daily newspapers – Not permissible ( Council Directive 77/91, Arts 25 and 29 ) The Second Directive (77/91), on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, and in particular Articles 25 and 29 thereof, must be interpreted as applying to banks constituted in the form of limited liability companies. The criterion adopted by the Community legislature to define the scope of the Second Directive is that of the legal form of the company, irrespective of its business.Article 25 of the directive, pursuant to which any increase in capital must be decided on by the general meeting, precludes national legislation under which the capital of a bank constituted in the form of a public limited liability company which, as a result of its debt burden, is in exceptional circumstances may be increased by an administrative measure, without a resolution of the general meeting. Although the directive does not preclude the taking of execution measures intended to put an end to the company's existence and, in particular, does not preclude liquidation measures placing the company under compulsory administration with a view to safeguarding the rights of creditors, it continues to apply where ordinary reorganization measures are taken in order to ensure the survival of the company, even if those measures mean that the shareholders and the normal organs of the company are temporarily divested of their powers.Since the application of a rule of national law such as that prohibiting the abusive exercise of rights must not detract from the full effect and uniform application of Community law in the Member States, an action by a shareholder on the basis of Article 25 cannot, without the scope of that provision being changed, be deemed to be abusive merely because he is a minority shareholder of a company subject to reorganization measures or has benefited from the reorganization of the company.Publication in daily newspapers of an offer of subscription in connection with an increase of capital does not constitute information given in writing to the holders of registered shares within the meaning of the third sentence of Article 29(3) of the directive where the national legislation does not provide for publication in the national gazette appointed for that purpose.

JUDGMENT OF THE COURT 12 March 1996 (1)

((Company law – Directive 77/91/EEC – Alteration of capital of a bank constituted in the form of a public limited liability company – Direct effect of Articles 25(1) and 29(3) of the directive – Abuse of rights))

In Case C-441/93,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Polimeles Protodikio Athinon for a preliminary ruling in the proceedings pending before that court between

and

supported by

on the interpretation of Article 25 et seq. and Article 29 of the Second Council Directive, Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ 1977 L 26, p. 1),

THE COURT,,

composed of: C.N. Kakouris, President of Chamber, acting for the President, D.A.O. Edward and G. Hirsch (Presidents of Chambers), G.F. Mancini, F.A. Schockweiler, J.C. Moitinho de Almeida, P.J.G. Kapteyn (Rapporteur), C. Gulmann, J.L. Murray, H. Ragnemalm and L. Sevón, Judges,

Advocate General: G. Tesauro,

after considering the written observations submitted on behalf of:

having regard to the Report for the Hearing,

after hearing the oral observations of Panagis Pafitis and Others, represented by Sofia Koukouli-Spiliotopoulou, Ioannis Stamoulis and Feidias Doukaris, Investment and Shipping Enterprises Est and Others, represented by Feidias Doukaris, Trapeza Kentrikis Ellados AE and Others, represented by Marios Bachas, Konstantinos Mavrias and Krateros Ioannou, of the Athens Bar, Trapeza tis Ellados AE and Others, represented by Ilias Soufleros and Vasileios Kontolaimos, the Greek Government, represented by Panagiotis Mylonopoulos, Special Legal Assistant in the Department for Community Matters of the Ministry of Foreign Affairs, and Dimitrios Leontokianakos, Legal Assistant in the Independent Office for European Community Affairs of the Ministry of the National Economy, acting as Agents, and the Commission, represented by Dimitrios Gouloussis, at the hearing on 6 June 1995,

after hearing the Opinion of the Advocate General at the sitting on 9 November 1995,

gives the following

The applicability of the Second Directive to banks constituted in the form of public limited liability companies

The applicability of Article 25 of the Second Directive to measures for the reorganization of banks

The conditions for the application of Article 25 of the Second Directive

On those grounds,

THE COURT,

in answer to the questions referred to it by the Polimeles Protodikio Athinon, by decision of 3 August 1993, hereby rules:

Kakouris

Edward

Hirsch

Mancini

Schockweiler

Moitinho de Almeida

Kapteyn

Gulmann

Murray

Ragnemalm

Sevón

Delivered in open court in Luxembourg on 12 March 1996.

R. Grass

C.N. Kakouris, President of Chamber

Registrar

For the President