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The new Naturgy and the crooked lines of the ‘straight’ corporate governance

Naturgy or the nemesis of CNMV. The energy company has staged a brawl in style with the stock market supervisor in its attempt to adapt the most elementary rules of corporate governance under the genuine industrial criteria of La Caixa. The tensions caused by the takeover bid for the activist fund IFM caused an intense, albeit hidden, confrontation between the senior officials of the supervisory body and the general secretary of the listed company, Manuel Garcia Cobaleda. Now, once the armistice has been signed with the Australian suitor, the regulator and the regulated have had a hard time as a result of the land movement registered within the council that he presides Francisco Reynes with the transfer, appointment or re-election of the directors proposed to the general meeting on March 15.

Isidro Faine has shown an exquisite waist game to return from the Antipodes in its cold war with the foreign investor and redirect a peace treaty in which the Cartesian mentality of the president of Naturgy has also been essential. The initial skepticism about the suspicious intentions of breaking up the group that hid the public offer of IFM has given way to a spin-off agreement blessed by the interested parties for the sake of what the official spokespersons define as the development of the project for the benefit of all the shareholders. The reference partners have invoked the general laws to draw a corporate map of which they have only disclosed the starting point. At the expense of the obstacles that may arise in the itinerary it is certain that all of them have located the place where the treasure is hidden and what are the jewels that will give shine and parné to each one of them.

The chameleonic negotiation process was assumed as a lesser evil by Naturgy’s historical shareholders once the Government decided to face the conflict that the irruption of IFM had raised. The attempts to obstruct the operation by administrative means failed before much more effective persuasiveness than other Spanish groups They valued before the Ministry of Economy their outstanding investment position in the aboriginal country. After listening to the fears of each other, Nadia Calviño applied herself with the same story, refusing to admit the slightest risk that could affect her political performance. Thus, the vice president forwarded the file through the regulatory channel so that the problem was reduced to a hand in hand between the company and the Securities Commission.

The CNMV had a tough time with the general secretary of Naturgy and also ordered Criteria to stop buying shares in a block of its energy subsidiary

The main point of friction took place on the occasion of the opinion that the board of Naturgy had to formulate about the famous takeover bid. It was the moment the regulator was waiting for. clear up the great unknown that Criteria raised about the convenience of the operationsince the other great partners of reference, the duo GIP-CVCThey had already announced from the first day that they were not going to attend the offer. The CNMV ruled out any imputation of concerted action between the two foreign funds and the third one that knocked on the door, but it also ordered the business holding of La Caixa to stop buying blocks of Naturgy shares. The recurring acquisitions of these bundles of titles on a takeover company aroused the suspicions of the regulatorwhich required an official clarification from Criteria regarding its position as a basic element of information for minority shareholders on the stock market.

The senior management of the Securities Commission was stunned when it verified Naturgy’s legal arguments to facilitate Criteria’s escape. It was the aforementioned lawyer Cobaleda who provoked the stupor of the supervisors when he argued that the proprietary representative of the La Caixa group on the board of the energy company, Enrique Alcántara García-Irazoqui, was not compelled to state the opinion of the shareholder he represented.to beyond contributing, yes, his own about the matter in question. The conflict of opinion has given rise to an angry reaction on the part of the CNMV that has resulted in an express communication to the market by the handy formula of a questionnaire of questions and answers, the famous Q&A imported from the Anglo-Saxon world, but which supposes a clear slap on the wrist for all those who try to twist current legislation at will.

The presiding entity Rodrigo Bonaventure has made it very clear that the mandatory report that listed companies have to make to recommend for or against a possible takeover bid must contain the opinion of each of the shareholders represented on the board of directors and, more importantly, your intention to accept or reject it. This principle is based on the status of proprietary directors as representative agents of the reference shareholder. Criteria tried to swim and put away her clothes in the face of the questions raised by the arrival of a stranger who, according to some, sneaked into Naturgy by entering through the window. But the CNMV applied itself in compliance with the strictest legal framework and the industrial arm of La Caixa had no choice but to bending the elbow in what some analysts graphically interpret as a ‘little cut of the sleeves’.

Naturgy’s independent directors do not even meet the minimum quota established by the good governance code for all listed companies

Without wishing to offend the authorities, Criteria went off on a tangent with one of lime and one of sand. On the one hand, avoided an opinion that discouraged the takeover bid so as not to cause a drop in Naturgy’s shares then harm all those determined to keep their titles. At the same time, and in a message aimed at the good listener, made a formal vow not to sell their titles within an initiative that was extended to the group of directors of the company itself. That’s the way it is, the main shareholder joined forces with its energy subsidiary and was about to run aground on the offer. He didn’t get it, but in return forced a negotiation that IFM had initially rejected and that, once the cards are placed face up, allows a compromise solution from the separation of regulated businesses from those others that are managed within the liberalized market.

The still in which the peace process has been distilled concluded, as could not be otherwise, with a culmination worthy of going down in the annals of corporate governance. An independent, to be exact, coordinating director of Naturgye as he was Ramon Adellsubmits his irrevocable resignation in a letter addressed to Reynés on February 8. The letter explains the resignation as if it were a necessary immolation to adjust the representation within the board to the shareholding proportions of the company, taking into account that after the takeover bid the free float on the stock market has been reduced to 20%. In other words, the cessation is justified in the desirability of reducing the number of independents to accommodate new Sundays. What the interfect did not say is that Two days later, the Naturgy board of directors reappointed him as a director representing Criteria.

The short dribble has been felt by the CNMV as a kick to save the parties, among other reasons because the code of good governance establishes in its recommendation 17 that independent directors of listed companies must reach half of the total or, in exceptional cases, at least one third. In the new Naturgy they remain in three of twelve, 25%, but ehe regulator has turned a blind eye this time so as not to disturb the stability of a strategic company. Not in vain, the business division grants freedom for the funds to sell the assets they wish and for Criteria the opportunity to seek an industrial partner to help develop a ‘national champion’ of which the business market in Spain is not so abundant. The right and good corporate governance is supposed to in no case be handled at the request of a party, but there are not a few occasions when his commandments are written with crooked lines.