Approved new government decree regulating general meetings

UniCredit Bank Hungary Zrt.
Special rules to be applied for General Meetings of Hungarian public limited companies during the emergency period.
Fri, 17/04/2020

The Hungarian Government approved the Government Decree no. 102/2020 (Decree), setting the Special Rules to be applied in case of personal and property joint ventures during the emergency period, on 10th of April 2020. The Decree, amongst others, regulates the convening of the General Meeting of Hungarian companies listed on the Budapest Stock Exchange during the state of emergency officially declared by the Government due to the Covid-19 pandemic situation.

According to the Decree the annual general meetings cannot be held with the physical presence of the shareholders during the emergency period, and in case of public limited companies, neither electronic nor voting by post/letter (decision making without a meeting) is possible. The Management of the company (Board of Directors in case of publicly limited companies), subject to limitations set out by the Decree, is empowered to solely decide on the agenda points , even decide differently than the already published proposals, however the shareholders will still have the right to subsequently approve the resolutions of the Management.

The right for convocation of the general meeting for subsequent approval of resolutions passed by the Management under the Decree is ensured for shareholders who hold at least 1% of the voting rights (one shareholder alone or more shareholders together) and are already registered in the Company Registrar through the shareholder identification carried out in connection with the General Meeting organized under the Decree. The shareholders are entitled to request the re-convocation of the general meeting within 30 days starting from the cessation of the state of emergency.

For the approval of the decisions on the annual report and on the use of after-tax profit, shareholders may request the convocation of the General Meeting in case  their request is submitted by 31 May 2020 (or within 30 days of the publication of the decision of the Management on the annual report and on the use of after-tax profit should the business year  differ from the calendar year). Failure to meet the deadline will result in forfeiture. In case the General Meeting is re-convened with the aim to approve the resolutions of the Management on annual reports and on the use of the after-tax profit, any related dividend may be paid only if approved at the re-convened General Meeting.

Should there be less than 180 days between the termination of the emergency period and 1st of April of the following calendar year, the holding of a General Meeting to approve the resolutions of the Management is no longer possible, however, the approval of the resolutions made during the emergency period may be included in the agenda of the next General Meeting.

Investors are suggested to contact the GSS Relationship Management team for further details.

Impact on investors: Due to the state of emergency officially declared by the Government, intermediaries and the investors cannot follow the usual General Meeting related procedures. Investors will be notified in detail case by case, when issuers will publish their new procedures aligned with the Government Decree no. 102/2020 regulating the General Meetings. In case the Management will make decisions instead of the shareholders, the shareholders being in the possession of at least 1% of voting rights have the right to ask the company to convene a general meeting after the emergency period to re-confirm or reject the decision taken by Management.