5.6 The case of HSH Nordbank

This case concerned the State aid to HSH Nordbank. HSH Nordbank was owned by the City State of Hamburg and the State of Schleswig-Holstein (the “Länder”) and several minority shareholders. A major question of this case concerned the admissibility of the action for annulment, since the action was brought not by the beneficiary bank itself, but by two minority shareholders of the beneficiary bank.

On 12 November 2015, the General Court rendered its judgment. As regards the admissibility, the General Court made a distinction between the first part and the second part of the application. In the second part of the application, the applicants sought the annulment of the HSH Nordbank-decision in its entirety. In that regard, the General Court held that the applicants had not shown that they had an interest in bringing proceedings separate from that of HSH Nordbank. Therefore, they could not be considered to be individually concerned for the purposes of the fourth paragraph of Article 263 TFEU.1 The second part of the action was therefore declared inadmissible.

The General Court then assessed the admissibility of the first part of the action, in which the applicants sought the partial annulment of the HSH Nordbank- decision, in so far as, by that decision, the Commission had imposed obligations on the applicants as minority shareholders.

These obligations had the following background. In 2009, HSH Nordbank received State aid in the form of a EUR 3 billion recapitalisation (which took place in the form of ordinary shares with voting rights). An important feature of the recapitalisation was that only the Länder injected capital into HSH Nordbank; the minority shareholders did not participate in the recapitalisation. As a result, they were diluted. However, in its Opening Decision on HSH Nordbank, the Commission considered that the issue price of the State recapitalisation was too high and that consequently, the minority shareholders benefited disproportionately by not being completely diluted.2 Therefore, in the final decision (“the HSH Nordbank-decision”), the Commission took into account several additional burden-sharing measures. This additional burden- sharing was achieved by means of a capital increase in exchange for a lump-sum payment of EUR 500 million. Firstly, HSH Nordbank had to make a payment of EUR 500 million to HSH Finanzfonds (which was owned and controlled by the Länder). Secondly, at the same time that amount was used by HSH Finanzfonds to acquire new shares in HSH Nordbank, thus increasing its shareholding in that undertaking. Thirdly, that capital increase for the sole benefit of HSH Finanzfonds automatically reduced the stake held by the other shareholders, including the applicants. In other words: they were diluted.

By the HSH Nordbank-decision, the minority shareholders were banned from acquiring new shares. The General Court held that this ban adversely affected the applicants’ property rights, since the minority shareholders of HSH Nordbank were prohibited from retaining their relative shareholding in the capital of HSH Nordbank. As a result, the General Court concluded that the applicants had established that they had an interest in bringing proceedings separate from that of HSH Nordbank. The action was therefore admissible since the applicants were directly and individually concerned by the HSH Nordbank-decision in so far as one of the conditions set by the Commission was to increase HSH Nordbank’s capital for the sole benefit of HSH Finanzfonds.

As regards substance, the applicants questioned the validity of the Commission’s position on the possible existence of indirect aid in favour of the minority shareholders of HSH Nordbank. In that regard, the General Court held that the Commission had taken into account all the relevant facts and had not made a manifest error of assessment in considering that the issue price of EUR 19 per share was too high and that this had to be compensated by additional burden sharing among the shareholders.3 The action for annulment was therefore dismissed.4