British Hedge Fund Fights Hungarian Law

Nov 15 2007 | 1:08pm ET

A British hedge fund is introducing Hungary to the free-market principles of the European Union.

Annoyed by the country’s recent change to its corporate law—which sought to prevent a hostile takeover of oil and gas company MOL Magyar Olaj- és Gázipari Nyrt, Hungary’s largest company by sales volume—Centaurus Group has formally complained to the European Commission.

The hedge fund charges that “Lex MOL” prevents the free movement of capital and freedom of establishment, as well as contravening shareholder rights. Centaurus is a MOL shareholder.

This week, the EC sent Hungary formal notice that the law makes public takeover bids too difficult, as well as complaining about the power it gives public authorities to appoint directors to the boards of energy companies. Hungary has two months to provide a “satisfactory” response to show that Lex MOL does not violate EU law.

Hungary joined the EU in 2004.

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