The European Court of First Instance confirmed on 14 July under the accelerated procedure that the examination of the takeover bid from the Spanish group Gas Natural for its compatriot Endesa, announced on 5 September 2005, does not fall within the European Commission's ambit (Case T-417/05). The Commission ruled on 15 November 2005 that the merger did not have an EU dimension. Endesa challenged this decision before the Court of First Instance on 29 November 2005 on the grounds that in reaching its decision, the Commission had incorrectly evaluated group turnover. This was a key point since the Commission uses turnover to determine whether or not a proposed deal falls within the EU's ambit. Endesa maintained that the Commission's assessment of its turnover should have been based on IAS/IFRS (International Financial Reporting Standards) standards and not on the Spanish accounting standards previously in force.


The Court points out that the Commission must refer to company accounts for the previous year - in this event 2004 - since verified accounts normally only exist for the previous complete year. A business under an obligation to draw up annual accounts subject to verification has only one form of official accounts: those established and verified in accordance with the relevant legislation. The rules applicable in Spain for accounts for the 2004 financial year were Spanish PCGA (general accounting principle)...

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