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Russian Dep PM urges removal of subjective obstacles to investment in Hungary

Russian Deputy Prime Minister Viktor Zubkov said economic cooperation between Russia and Hungary was successful but added that the elimination of subjective obstacles to Russian investments would do good for the development of the Hungarian economy.

Russia continues to allow in Hungarian investors, Zubkov said in a speech closing a meeting of the Hungarian-Russian Intergovernment Economic Cooperation Committee.

Zubkov was likely making a reference to Russian oil and gas company Surgutneftegas's exclusion from shareholders meetings of Hungarian peer MOL. Surgutneftegas acquired a 21.1% stake in MOL from Austrian peer OMV for €1.4 billion in March 2009. MOL's management called the deal unfriendly and Hungary's president expressed concern about the transaction. Surgutneftegas could not vote at MOL's last shareholder meeting in 2010 because financial market watchdog PSzÁF had not closed an investigation of its acquisition of the MOL shares in time for the Russian company to be included in the share registry. Surgutneftegas could not vote at the AGM a year earlier either because the Hungarian Energy Office had not yet acknowledged the MOL share purchase.

National Development Minister Tamás Fellegi said after the meeting on Friday that he was satisfied with the development of bilateral relations. He stressed that the framework for the operation of foreign companies in Hungary is determined by the country's EU membership.

Speaking to Hungarian journalists after the meeting, Fellegi said open questions concerning MOL and Hungarian national carrier Malév were discussed. Surgutneftegas bought the stake in MOL from OMV at its own risk as the acquisition was not in line with regulations. The matter is one for the two companies to solve, not the government; however, it is being managed at government level because it is "creating a bad atmosphere and could stand in the way of progress", he added.

In spite of the Russian partner's comments, Fellegi said there were no subjective obstacles or discrimination in the matter, rather it was about a publicly-traded company whose shareholder decisions were approved by the Hungarian Energy Office and the court. Russian investors have every necessary means of legal protection in Hungary, if they are in line with the rules, he added.

Talks on the debts of Malév are being discussed at expert level, because the matter has been complicated by the EU ban on state support for companies, but a solution could be reached within some weeks, Fellegi said.

Troubled Malév was renationalised in March 2010, but Russia's state-owned Vnesheconombank still holds 5% of the airline's parent company.

Hungary confirmed at the meeting its interest in the construction of the South Stream pipeline which will deliver Russian gas to Europe.

A joint declaration signed by the parties after the meeting outlines chances for cooperation between business organisations as well as frameworks for cooperation between the two governments in the areas of modernisaiton, innovation and research and development.