Panic

The current panic among MPs desperate to protect Dutch companies from aggressive hedge funds reveals just how little has changed in this paradise of protectionism. It is also completely at odds with all too recent government policy to increase shareholders rights.


Of course, when finance minister Gerrit Zalm threatened companies with legislation increasing shareholders rights in 1999, he was trying to thwart recalcitrant directors, not pave the way for foreign corporate raiders. And even the pugnacious Zalm was reluctant to go beyond forcing directors to publish their salaries in the company annual reports. For that matter Zalm has been strangely silent during the current debate.
At least MPs have been consistent, with a wide cross-section repeatedly rejecting EU legislation that would force Dutch companies to dismantle the many defensive structures erected to keep the foreign hoards away from precious Dutch companies. Although more ‘modern’ Dutch companies have indeed done away with their defenses, something like two-thirds of AEX-listed companies are basically impregnable to hostile takeovers. If threatened they simply issue shares to a friendly foundation, making it impossible for the aggressor to acquire enough shares for an official bid.
Now that two symbols of Dutch entrepreneurship, industrial conglomerate Stork and food retailer Ahold, are under siege from hedge funds demanding the split up of the companies, economic affairs minister Joop Wijn (CDA) has got the xenophobic bug big time. And he’s being backed by an unholy alliance of the Labour party, the unions and a large section of the Dutch Old Boys network, including former members of the 1997 Tabaksblat corporate governance committee, set up to curb the power of company directors. Describing the hedge funds as ‘locusts’ and ‘barbarians’, Wijn is now making typically anachronistic appeals to Dutch pride and warning that Holland is in danger of being taken over by foreigners.
Oddly enough, these same people have no problem with Dutch companies acquiring foreign peers. Dutch central bank president Nout Wellink went so far as to protest to the president of the Italian central bank, Antonio Fazio, when Fazio was obstructing ABN Amro’s takeover of Italian bank Antonveneta. But even then, in a fit of unconscious hypocrisy, Wellink admitted he would not be entirely happy if a foreign bank tried to acquire ABN Amro. It seems they really do believe in one rule for the Dutch and another for everyone else.