After the shareholders gave their overwhelming support (93.3% of the Board of Directors in favor) to the transfer of the corporate headquarters railway It would be appropriate to go to the Netherlands and learn from a very tumultuous economic, political and media case, hoping that, aside from surprises, we will find the company listed on Wall Street before the year is out.
This is the first big lesson of the case. To begin with, as one expert points out, “it wasn’t the best time” for the company to make such a decision: “the current political situation, due to the upcoming elections, the government’s fierce criticism of businessmen as well as being a listed company…”. These resources suggest that in such a situation the company should always perform a risk and opportunity analysis, and the first of these push more convenient. Some even point out that, considering the possibility of a change of government before the end of the year, it would not be unreasonable to wait until 2024, when an Executive might be more understanding if there is a turn in the elections. business sensitivities.
Being in the middle of an election or multiple selection process Ferrovial has faced beatings from both political poles. Trying to take advantage of the government, its own constituencies, and its partner’s constituencies. Blaming the Opposition to the Executive for electoral benefits.
This second lesson stems rather from a doubt. Should the company have notified the Government of its decision earlier? Should I even accept it? One criticism of Ferrovial stems from the fact that he announced his departure to the highest level of the Executive (president and vice president of economics) just hours before he announced his departure, leaving no room for reaction or reaction to Moncloa. even digestion. We do not know to what extent this contributes to subsequent inflammation. We know that, unprecedentedly, Prime Minister Pedro Sánchez himself, Just 48 hours after announcing the farewell, he quoted Rafael del Pino by name and accused him of not being a “decisive” businessman.
Therefore, the answer to the question is not clear. In the market they say “The question is, it could also be the company’s lack of trust in the current Manager”. What would happen if you told a government that was not afraid to attack the main businessmen with their first and last names, that you were leaving Spain?
This is a point on which there is clear agreement. Communication of the company, especially in the first moments, not as successful as expected. “It was very cold in the beginning,” they explain from a large specialist organization. In fact, the proposal to change headquarters to the Netherlands reached the media, and thus the public, through a related incident at the market regulator, the Securities and Exchange Commission (CNMV). From the very beginning, there was a feeling that the company did not communicate strongly and specifically and underestimated the impact of its decision.
The fact is that the Government has been giving Ferrovial and its president for some time now with all its artillery and from all fronts (personal, commercial, tax, political…). After reacting and going to explain its position to the media, the company was able to position many opinion creators against the government’s backlash, if not entirely in favour.
In the first moments of communication, Ferrovial escaped the idea that it had moved its headquarters to the Netherlands, as it was an environment with greater legal certainty. One for many manual error because it had two dangerous readings: There is less legal certainty in Spain (an idea the Government could not ignore) and the decision was about the harassment suffered by the business class (this was also unacceptable due to the risk of creating a call effect between companies). In fact, the company’s subsequent correction, which made it clear that Spain has legal security comparable to that of major European countries, was immediately celebrated by Vice President Nadia Calviño with her only victory in this crisis at this time.
“Another issue,” emphasizes one expert, “would be to speak of legal certainty, which has more to do with the stability of the legal framework, but Spain’s legal certainty is guaranteed by Europe.” As economist Miguel Ángel Bernal points out, “you can’t change or have a changing legal framework.”
This is a lesson for the government to heed. Due to the departure of Ferrovial in the first place It could act as a stumbling block for some companies that feel attacked by the government, even for those who don’t like the climate created by some Executives against big companies. Recall that the president of Mercadona, Juan Roig, was accused of being a “ruthless capitalist”; Inditex’s, Amancio Ortega, “tax evader”; The Head of Government described Rafael del Pino as a “slightly accommodating” businessman … Ferrovial is shaping the operation in “the freedom of establishment that feeds the essence of the European Union,” as its president recalls. It was not a random comment. This was a nod to Sánchez himself: Spain assumes the presidency of the Council of the European Union for the fifth time on 1 July. “How do you think the attacks on Ferrovial at Moncloa feel in Brussels?” he asks.
From almost the first minutes of the trial, The government used every possible argument to attack Ferrovial’s decision.. He quoted the anti-takeover shield, something that has been discredited by experts simply because the operation was not a takeover bid; He implied that he had motives of personal and financial interest, of which nothing was known until now… but still, the most worrying thing was filing with the Tax Office. It was said that first the Agency could take action on the matter and then (until the same Thursday of the meeting) the company would examine whether the company could enjoy the tax benefits of the Corporate Tax merger regime. In a letter from Gonzalo García, Minister of State for the Economy, to Ferrovial’s CEO, Ignacio Madridejos, the former argued that shareholders should vote knowing their “possible risks or probable circumstances”.
In the economic world, this has been interpreted not only as a veiled threat, but as the Government’s reluctance to use the Tax Office to undermine the operation. The problem is that the outcome of The Order’s action, if carried out, will be known in a year or two. But the serious thing is that it leaves a residue in society that institutions can be used on the basis of political interests, which is a very serious thing in a democracy. As Madridejos himself was responsible for quickly pointing out: “The Minister of State for the Economy should not prejudge or condition the purely technical criteria that would apply to other organisations”.