L 307/134 Official Journal of the European Union 7.11.2006 COMMISSION DECISION of 20 October 2004 on State Aid implemented by Germany for Landesbank Schleswig-Holstein — Girozentrale, now HSH Nordbank AG (notified under document number C(2004) 3930) (Only the German text is authentic) (Text with EEA relevance) (2006/741/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Commu- nity, and in particular the first subparagraph of Article 88(2) thereof, Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof, Having called on the Member State and other interested parties to submit their comments pursuant to the provisions cited above (1) and having regard to their comments, Whereas: L PROCEDURE (1) The subject of these proceedings is the transfer of Wohnungsbaukreditanstalt des Landes Schleswig-Holstein (WKA), Wirtschaftsaufbaukasse Schleswig-Holstein AG (WAK’) and the special-purpose real-estate reserve by the Land of Schleswig-Holstein to Landesbank Schleswig- Holstein — Girozentrale (LSH)). There are a further six cases in which proceedings have been initiated against Germany in connection with transfers of assets to Land- esbanks, and in particular to Westdeutsche Landesbank Girozentrale (‘WestLB’). (2) By letter of 12 January 1993, the Commission asked Germany for information on a DEM 4 billion capital increase for WestLB resulting from the incorporation of the housing organisation Wohnungsbauforderanstalt (‘WfA)) and on similar increases in the own funds of the Landesbanks of other Lander. It asked which Landesbanks had benefited from a transfer of public enterprises and for information on the reasons for those transactions. (3)  Germany replied by letters dated 16 March and 17 Septem- ber 1993. The Commission requested further information by letters of 10 November and 13 December 1993, to which Germany replied by letter of 8 March 1994. (4) By letters of 31 May and 21 December 1994, the Bundesverband deutscher Banken e.V. (BdB’), an association () O] C 76, 28.3.2003, p. 2. representing private banks established in Germany, informed the Commission that, among other things, WKA and WAK, together with their entire assets, had been transferred to LSH with effect from 1 January 1991. At the same time, WKA’s and WAK’s tasks had been transferred to the recently set-up Investitionsbank Schleswig-Holstein (IB’). IB operated as a special division of LSH. This increased the own funds at LSH's disposal and, in the BdB’s view, distorted competition in its favour since the parties had not agreed remuneration consistent with the market- economy investor principle. In its second letter, the BdB accordingly lodged a formal complaint and called on the Commission to initiate proceedings against Germany under Article 93(2) of the EC Treaty (now Article 88(2)). The complaint also related to similar transfers of assets to Landesbank Berlin, Westdeutsche Landesbank, Nord- deutsche Landesbank, Hamburger Landesbank and Bayer- ische Landesbank. In February and March 1995 and December 1996 several banks associated themselves individually with the complaint lodged by their association. By letters of 6 August 1997 and 30 July 1998, the BdB informed the Commission of two further transfers of assets, to Landesbank Schleswig-Holstein in Schleswig-Holstein and Landesbank Hessen-Thiiringen in Hessen. According to the BdB, the Land of Schleswig-Holstein intended to transfer the real estate it owned to IB as a special-purpose reserve forming part of LSH's equity capital. The BdB referred in this context to Section 20 of a bill amending the Schleswig-Holstein Investment Bank Act (version as at 26 June 1997), which stipulates that the real-estate assets, after deduction of liabilities, should be considered to constitute a special-purpose reserve forming part of LSH’s equity capital. The BdB also referred to the comments on Section 20 contained in the explanatory memorandum to this bill, which state that the special-purpose real-estate reserve constitutes part of the bank’s liable equity capital according to the principles of the Banking Act (Kreditwe- sengesetz). The stated objective of ‘mobilising Land assets in order to create liquidity without loss of disposal or