Information on General Meeting Season in Hungary

UniCredit Bank Hungary Zrt.
Special rules apply for General Meetings of Hungarian public limited companies during the emergency period.
Thu, 25/02/2021

Pursuant to the Law I of 2021 (the Law) on protection against the pandemic as of 22 February 2021, Government Decree no. 502/2020 (the Decree) on personal and property joint ventures will remain in force for additional 90 days following the promulgation of the Law, or until the Law is revoked.

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, was officially extended by 90 days on 22 February 2021 due to the outstanding 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. The Management of the company (Board of Directors in case of publicly limited companies), subject to the limitations set out by the Decree, is empowered to solely decide on the agenda points or even decide differently than the already published proposals, however the shareholders will still have the right to approve the resolutions of the Management.

The right for convocation of the General meeting to approve the 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 the profit after-tax, shareholders may request the convocation of the General Meeting in case  their request is submitted within 30 days from the publication of the decision of the Management. Failure to meet the above 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 cessation of the state of 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.

Impact on investors:. Due to the state of emergency officially prolonged by the Government, intermediaries and investors cannot follow the usual General Meeting related procedures. General Meetings with physical presence of the shareholders or their representatives cannot be held during the emergency period, investors will be notified in detail case by case, when issuers will publish their new procedures aligned with the Decree.