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. Last Updated: 07/27/2016

Surgut Blocked From MOL Meeting

BUDAPEST -- Surgutneftegaz will be blocked from voting at MOL's annual meeting on Thursday because the country's Energy Office has not yet approved its purchase of a stake in the Hungarian oil firm.

Surgut officially notified the Energy Office, or MEH, on April 9 of the purchase, but the watchdog, whose approval is necessary before the Russian investor can exercise its shareholder rights, has put several questions to Surgut.

"Before the office will confirm that it has acknowledged the purchase, it has put several questions to Surgutneftegaz to which it awaits the company's response," MEH said in a statement.

Hungary's 2003 Law on Natural Gas Supply requires the MEH to approve the purchase of a significant stake in a gas firm and stipulates that a shareholder cannot exercise its rights, with the exception of collecting a dividend, without such an approval.

For a shareholder to vote at Thursday's AGM, it had to be registered as a shareholder by April 14, but Energy Office approval is the precondition to such registration, according to Hungarian laws.

The Energy Office declined to comment further, and MOL also declined to comment.

Surgut bought a 21 percent stake in MOL from Austria's OMV for 1.4 billion euros ($1.8 billion) earlier this month. The deal angered MOL and the Hungarian government, as the Russian company failed to coordinate with either the government or the company in a transaction that involved what the government considers to be a strategically vital asset.

Earlier this month, MOL proposed amendments to its articles of association, which analysts said were designed as a defense against hostile takeovers.

According to a planned amendment, shareholders must declare who the "ultimate beneficial owner" of their shares is before their meetings, if requested by MOL's board of directors. Other proposed amendments would strengthen the special voting rights of the "B" series MOL share and delete the section, which says that the special rights exist only if the share is held by the Hungarian state.