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$1.5bn Goldman Sachs deal demolishes Danish ruling coalition

Published time: January 31, 2014 07:42
Edited time: January 31, 2014 09:29
Danish Prime Minister Helle Thorning-Schmidt addresses the media after the Socialist People's Party quit the government over the controversial sale of a stake in state-controlled energy group DONG to Goldman Sachs. (AFP Photo / Keld Navntoft)

Danish Prime Minister Helle Thorning-Schmidt addresses the media after the Socialist People's Party quit the government over the controversial sale of a stake in state-controlled energy group DONG to Goldman Sachs. (AFP Photo / Keld Navntoft)

Denmark’s minority government lost its coalition member in pushing through the parliament an approval for highly unpopular deal, which will sell a share in state-owned energy giant DONG to fifth-largest US bank, Goldman Sachs.

There is public resistance to the deal in Denmark, with an online petition against it approaching a record 200,000 signatures.

The Socialist People's Party (SF) walked out of the ruling coalition ahead of the parliamentary vote on Thursday, which approved the purchasing a 19 percent stake by a Sachs-controlled consortium for $1.5 billion.

The development does not make the Danish government collapse, but the remaining two parties have to replace six ministers in the 23-member cabinet previously held by SF members.

SF head Annette Vilhelmsen announced that she would resign her position in the party because she failed to secure a consensus among its ranks over the controversial deal

“It’s been a dramatic 24 hours. I must admit that there has been disagreement in the party, at a national level and in the parliament group,” Vilhelmsen said as cited by the Copenhagen Post. “I couldn’t gather the party.”

AFP Photo / Chris Hondros

Earlier several SF MPs announced that they would boycott the vote defying Prime Minister Helle Thorning-Schmidt, who threatened that SF would be tossed out of the ruling coalition, if any of its MPs didn’t vote for the DONG deal.

“As long as I am unable to vote after my beliefs then I cannot enter parliament so I have decided to boycott the vote today,” Özlem Cekic wrote on his Facebook page. “[The Goldman Sachs deal] could be expensive for taxpayers and I cannot believe that just once we [SF] can go against our government co-operation without being threatened to be kicked out of the coalition.”

The socialists sacrificed a membership in the Danish government, which they haven't had since 1959. But despite the socialist rebellion, the parliament approved the controversial deal on Thursday.

“We are pleased with the approval of this transaction and look forward to making this significant minority investment alongside the Danish State, ATP, PFA and the existing minority shareholders," a Goldman Sachs spokesperson told Business Insider.

The deal is quite unpopular in Denmark, where some 68 percent of people disapprove of it, according to Bloomberg.

An online petition calling to stop the sale had 150,000 supporters shortly before the vote, an explosive growth from around 68,000 on Saturday. By Friday morning there were almost 200,000 signatures.

On Wednesday evening an estimated 2,500 demonstrators rallied in Copenhagen to protest the deal, despite cold and snow.

People demonstrate against US multinational investment banking firm Goldman Sachs buying into the National Danish electricity supplier DONG in front of the Danish Parliament on January 29, 2014. (AFP Photo / Jeppe Bjoern Vejloe)

Critics of the sale are outraged, that Goldman Sachs will have veto power over any changes in DONG’s leadership and strategy. The right is normally reserved for shareholders with at least a 33 percent stake in a company.

There were also reports that Sachs bid was not the highest. An offer of PensionDanmark was 40 percent higher than the bid Goldman Sachs offered, TV2 News reported, citing a leaded note. But unlike the US bank, the company wanted a warranty for the entire amount, the report said. The Danish government denied this allegation.

There is also concern that Goldman Sachs would use tax havens like Luxembourg, the US state of Delaware and the Cayman Islands in their administration of the stake. The government assures that all due taxes will be paid in Denmark.

DONG in its present form was made through a merger of a state-owned oil-and-gas company and several electricity generating companies. The government currently has a 76 percent stake in the company, which will drop to about 60 after the deal is finalized. The company eventually plans to go public.

The company lately had losses and has plans to invest into renewable energy like wind turbines. The financial constraints required investments, which made Denmark offer a stake for sale.

Comments (19)

 

0040 31.01.2014 17:50

Is this the same woman who couldn't keep her hands off Obomber at Nelson Umbrella's funeral ? Les Toolish is right, she is a vulture capitalist.

 

David Richardson 31.01.2014 15:44

One can only hope, that as more and more people wake up to the fact that the world is controlled by the great vampire squid, also known as Goldman Sachs, and it's crony capitalist controlled governments.
The possibility exists that a turning point will be reached and we will, as a group, be able to throw of this yolk of oppression.
Unde rstand the propoganda, understand the language of mind control, and think for yourself. This will not end well.

 

Les Toolish 31.01.2014 13:32

Helle Thorning-Schmidt, another pretty-faced, fake social democrat selling her country out so she can be a major vulture capitalist when she leaves public service (to the rich). I see her hubby is in bed with every European vampire squid, blood-sucking multinational as the leader of GLTE. "Barack, you make me very rich woman. Of course I do "selfie" with you!"

View all comments (19)
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