The European Court of Justice has upheld Fininvest's appeal and annulled the ECB's decision against the qualified participation held by the financial company in Banca Mediolanum exceeding 9,99%. The Eurotower's decision was then motivated by Silvio Berlusconi's lack of honorability. According to the Luxembourg judges, the European Central Bank could not legitimately oppose Berlusconi's holding of a share for a situation that resulted solely from the maintenance of a qualified participation that he had acquired before the transposition of the provisions of Union law, on which the central institute had based itself.
The Mediolanum-Berlusconi affair
The story begins in 2014, when the Bank of Italy has ordered the sale, within 30 months, of Fininvest's shareholding in Mediolanum exceeding 9,99% and the immediate suspension of the voting rights attached to the shares because Silvio Berlusconi had been found guilty of tax fraud and, consequently, no longer satisfied the requirement of honorability to which the holding of a qualified shareholding is subject. The decision of the Bank of Italy was annulled by Italian Council of State on March 3, 2016. Meanwhile, in 2015, Mediolanum was incorporated by its daughter company Banca Mediolanum.
Again in 2016, the ECB, questioned by the Bank of Italy, opposed the acquisition of a qualified shareholding in Banca Mediolanum by Silvio Berlusconi precisely because the latter did not satisfy the condition of honorability applicable to holders of qualifying shareholdings.
Since then, the share of approximately 30% held by Fininvest in Mediolanum had been frozen for the part exceeding 9,9 percent.
The appeal by Silvio Berlusconi and Fininvest to have this decision of the ECB annulled was rejected by the Court. Fininvest and the heirs of Silvio Berlusconi appealed the ruling.
The ruling of the European Court of Justice
Today, theThe Court of Justice of the European Union has annulled the ECB's decision, accepting Fininvest's appeal.
According to the EU Court, the ECB could not legitimately oppose the holding by Silvio Berlusconi of a qualified shareholding in the company Banca Mediolanum, a situation which resulted solely from the retention, by the interested party, of a qualified shareholding which he had acquired before the transposition of the provisions of Union law on which the ECB had relied.
For the Court, the Tribunal has distorted the facts of the dispute and committed an error of law in declaring that the appellants acquired a qualifying shareholding in Banca Mediolanum in 2016. This error arises from the misrepresentation of the scope of the Bank of Italy's 2014 decision which, contrary to what the Court stated, did not have the effect of reducing Fininvest's shareholding in Mediolanum, but only of suspending the voting rights attaching to the shares subject to an obligation to transfer. Such transfer was to take place only subsequently, within a period of 30 months, through a trustee in charge of the sale. On the day on which the Italian Council of State declared the annulment, the disputed shareholding had therefore remained unchanged. The change in the structure allowing the holding of that shareholding, resulting from the incorporation of Mediolanum by Banca Mediolanum, did not change this analysis.
Accordingly, Silvio Berlusconi could not be considered to have acquired a qualifying holding in 2016, which would have required notification and assessment by the competent authorities. He merely retained, the press release explains, a qualifying holding which had been acquired well before, at a date when the provisions of Union law applied by the ECB had not yet been transposed into Italian law. Since these provisions are without retroactive effect, the ECB – concludes the Luxembourg Court – could not legitimately oppose the holding of a qualified shareholding in Banca Mediolanum by Silvio Berlusconi.
