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The Courts Also Finds for FCC in Its Dispute with Acciona

01/02/2005

The Courts Also Finds for FCC in Its Dispute with Acciona

Barcelona Court of First Instance Number Two has ruled in FCC's favour in the company's dispute with Acciona regarding the latter's claim that it is entitled to have three representatives on the FCC Board of Directors.

Acciona filed a complaint challenging the corporate resolutions made at the General Meeting of Shareholders in FCC held in Barcelona on 23 June 2004 dismissing three directors appointed by Acciona in proportional representation of its stake in the company.

The court's ruling recognises FCC's legitimate right to object to having three representatives of its competitor sitting on its board of directors and sentences Acciona to pay the costs of the dispute.

The ruling states that Acciona is ''an actual, direct competitor of Fomento de Construcciones y Contratas'' and adds, ''The tie binding Acciona with the three directors (appointed by Acciona) in some measure contaminates how they behave in the post from which they have been dismissed''.

''The right to information, the ruling is quoted as saying, ''know-how'' in bidding processes, confidential information and goodwill, among other rights directors must have, mean that, no matter how impeccable directors' behaviour is, the risk of leaks is impossible to avert entirely. These considerations support the fitness of the directors' dismissal'' on the legal grounds that they have interests that conflict with FCC's own interests.

The ruling ends by stating, ''The prudence of the previous decision - the dismissal of these directors - is supported by the feelings of the shareholders in Fomento de Construcciones y Contratas, whereas 74 of those attending in person and 866 of those attending by proxy agreed to the dismissal, and only Tibest Cuatro (a subsidiary of Acciona) and Acciona were against it''.

The ruling remains open to appeal.

This new court victory for FCC is added to the triumph of mid December of last year, when the Directorate-General of Registries and Notarial Affairs found for FCC in the formal procedure lodged by its General Meeting of Shareholders to reject the directors appointed by Acciona, completely overturning the Mercantile Registry's decision on registrability.