Test Case Ahead On Sanofi's Chinoin Holding

Small investors in the Hungarian pharmaceutical company Chinoin Rt are considering bringing a test case against Chinoin's majority shareholder, France's Sanofi, which has a 76% holding in the firm.

According to MTI Econews, the shareholders believe that under Hungarian company law, if one shareholding company acquires 75% of the shares of another, then the minority shareholders can demand that the new majority shareholder buys their shares or at least guarantees the payment of a dividend. However, the question arises as to whether this law applies to a foreign shareholder. Asked about the situation, Sanofi told the Marketletter that at this stage it does not have any comment.

Meantime, MTI Econews also reports that Nomura Research has predicted that pharmaceutical companies in Hungary will suffer as a result of a likely fall in drug consumption over the coming period. Drug prices have been rising rapidly in Hungary recently, and this has led to a government investigation into the matter (see also page 11).