HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
financing shareholders can secure material influence in return for their financial support. 11.7 Company Prevention and Response to Activist Shareholders Companies are expected to deal with shareholder activism in compliance with applicable laws, the com- pany’s interests, and with due respect to the equality of shareholder rights. While keeping the legal frame- work, constructive negotiations and the conciliation of interests are often advisable to avoid escalations and preserve corporate co-operation and stability. Generally, directors are obliged to focus on the inter- ests of the company, but the interests of the company do not necessarily coincide with the interests of its shareholders. Also, directors may not be instructed by the shareholders nor have their competence interfered with by the shareholders (with certain exceptions: see 2.8 Shareholder Approval and 8. Controlling Com- pany ).
When directors face shareholder activism, they must assess shareholder demands within the statutory legal framework, design their actions and decide whether or not to comply with the activist shareholder’s goals, prioritising the company’s interests. If the activist shareholder’s demands are not satisfied, the share- holder may respond with statutory remedies.
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