The European Court of Human Rights (ECHR) on Tuesday declared a case brought by shareholders of savings cooperatives in Hungary against the state inadmissible, according to a report by state news wire MTI.
In the case, lodged in 2014, the shareholders complained that legislation integrating the countryʼs savings cooperatives had "excessively interfered" with the exercise of their ownership rights, including appointing board members and deciding on dividends.
The court unanimously decided to strike out the application from its list of cases as it is "incompatible ratione personae with the provisions of the [European Convention on Human Rights]".
ECHRʼs judges argued that the provisions in the legislation on the integration of the savings cooperatives neither targeted nor negatively affected shareholdersʼ rights. The legislation impacted rather the executive boards of savings cooperatives, thus the savings cooperatives had a right to legal appeal, but not shareholders, they explained.
The court also noted that other European Union member states have placed restrictions on the operation of credit institutions in light of the fact that insufficient regulation of the sector creates significant risk for the entire economy.
Hungaryʼs government-mandated the integration of the countryʼs savings cooperatives to ensure compliance with stricter EU rules on capital requirements.