Spanish companies 'unnerved' by shareholding voting proposal

Several of Spain's largest listed firms are likely to oppose the government's move to abolish shareholder voting limits, it has emerged.

According to the Financial Times, the development indicates that a "power struggle" is now looming over the proposal, which the government has presented as an attempt to improve corporate governance standards in Spain.

However, organisations such as the utility provider Iberdrola and gas company Repsol are against the reform, arguing that it would leave them more vulnerable to foreign takeovers.

In addition, there are fears that the move would help some of Spain's debt-laden construction firms to gain a foothold in the energy sector.

Citing a recent report from the Spanish financial daily Expansion, Reuters revealed that the two companies, along with telecommunications giant Telefonica, are considering whether to adopt a "common position" on the issue.

Under the proposed changes, all shareholders would be given voting rights equal to their holdings.

Companies such as Iberdrola and Repsol currently limit voting rights at shareholder meetings to ten per cent, regardless of the size of stake in the business.