Based on the authorisation received from the Parliament, the Hungarian Government approved Government Decree no. 502/2020 (Decree) on personal and property joint ventures as of 16 November 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 that was officially declared by the Government on 10 November 2020 due to the second wave of the Covid-19 pandemic.
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 public 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 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’s identification carried out in connection with the General Meeting. The shareholders are entitled to request the re-convocation of the General meeting within 30 days starting from the revocation of the state of emergency.
For the approval of the decisions on the annual report and on the use of the after-tax profit, shareholders may request the convocation of the General Meeting in case their request is submitted within 30 days from the publication. 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 1 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 declared by the Government, intermediaries and 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. 502/2020.