PARIS: Vivendi shareholders rejected a resolution to deny long-term investors double voting rights at the group's general assembly in Paris on Friday, a move that critics say primarily benefits company chairman Vincent Bollore.
The shareholder vote denied activist asset management group PhiTrust the two-thirds majority required to block application of a French law granting double voting power to investors whose holdings date back more than two years.
The provisions were introduced by the so-called Florange law passed last year by France's Socialist-led government in an attempt to encourage durable investment in French companies.
But a sizeable number of actors in the business community oppose the application on the grounds it gives even more power to dominant stock owners without requiring them to take bigger capital stakes to obtain it.
"Double vote rights do not offer much to small shareholders," argued PhiTrust managing general director Denis Branche during the Vivendi general assembly as he sought to win support for his rejection resolution that only got 50.15 percent backing.
"It benefits investors who want to exercise control of a company without paying for that control."
Several large companies including L'Oreal, GDF Suez, Renault, and banks BNP Paribas and Credit Agricole are expected to see vigorous attempts to block the double vote measure during nearing general assemblies.
Shareholders in concessions and construction group Vinci defeated the Florange provision during their annual meeting Tuesday.
The board of the Vivendi media company had called to reject the PhiTrust resolution, which mainly took aim at Bollore, the group's largest shareholder and chairman.
In recent weeks Bollore had increased his stake in Vivendi from an initial five percent holding to his current 14.5 percent position with a market value of 4.7 billion euros ($5 billion).
During debate Friday, Bollore rejected claims the double vote measure was particularly advantageous to him.
"Over half the companies in the CAC already have double voting rights," Bollore said, referring to the leading index on the Paris Bourse.
He also echoed government arguments that enhanced voting power for committed long-term investors encourages more coherent and stable management and planning for companies.
Despite that victory on double voting rights, however, Bollore and other Vivendi board members saw their motion to proceed with new capital increases denied by shareholders.
The PhiTrust resolution to reject introduction of the double vote provision -- which was backed by nine other Vivendi investors holding a total of two percent of its capital -- represented one of several fronts on which the Florange law is facing serious challenge.
Not all investors seeking to take advantage of the double vote provision are billionaire industrialists and financiers like Bollore, meanwhile.
Renault has expressed its opposition to moves by the French government to increase its stake in the company from 15 to 23.2 percent so it can ensure double voting provisions take effect.
French officials have said the move was in line with the French government being an activist investor and protecting the nation's long-term interests -- a frequently meddlesome habit Renault fears may create tensions with its industrial partners like Nissan.
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