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Magyar Telekom says again 2007 dividend to stand regardless of court ruling

The dividend that Hungarian telecommunications company Magyar Telekom paid for the year 2007 by July 6, 2009 will continue to qualify as a dividend regardless of the outcome of current legal proceedings, Magyar Telekom announced on the website of the Budapest Stock Exchange on Tuesday morning.

Magyar Telekom already published its stand on a first-instance court decision annulling the dividend resolution of the April 2008 AGM last Friday but said it decided to inform shareholders again in view of articles published in the press over recent days.

Even if an appeals court turns down the request to consider Magyar Telekom's late appeal, the first-instance ruling annulled the AGM decisions as of July 7, meaning that the dividend paid out up to that date will still qualify as dividend, resulting in no obligation and requiring no action of the shareholders, Magyar Telekom said.

According to Magyar Telekom records, the amount of dividend for year 2007 that was not paid until July 6, 2009 is HUF 17.4 million out of the total dividend of HUF 77.1 billion.

Magyar Telekom said it cannot fully exclude the possibility that it will be required to take further time-consuming and/or expensive corrective steps or that the matter would have other unforeseen detrimental effects on the company.

The company's Friday statement on the matter was in response to a HVG report which said that as Magyar Telekom failed to appeal the first-instance ruling on time, shareholders would either have to return their dividend or pay a higher tax rate on the amount.

A court annulled the decision to pay the dividend, as well as the other resolutions taken by the May 2008 AGM (except for one procedural resolution) in a first-instance ruling in May 2009 in a law suit filed by two small shareholders. Magyar Telekom had previously paid dividends to shareholders as approved by the April 2008 AGM.

Magyar Telekom' legal representative had missed the deadline for submitting an appeal. They filed a request for acceptance of the late appeal, and are still waiting for the Municipal Court of Appeals to decide on the request.

Shareholders approved a proposal to pay a HUF 77.1 billion dividend on 2007 after-tax profit of HUF 35.6 billion and HUF 41.4 billion from profit reserves at the AGM in 2008. (MTI-Econews)