Management of residual stat property: Implications for Corporate Governance of privatized companies the case of Hungary.

Privatisation is coming to the end in Hungary. By spring 1998 the bulk of state owned property was in private hands. According to official statistics, private enterprises account for nearly eighty per cent of GDP and almost three quarters of the capital is privately owned. More than one thousand firms were fully privatised during the period 1990-1997.
Considering the recent ownership structure of the Hungarian economy, already fairly similar to that of several West European countries, government can declare at any time the end of privatisation process. Debates on legal and institutional frameworks of controlling the residual state property have started in 1997. Despite of detailed proposals of several governmental apparatuses and consulting firms, no final decision was made before the parliamentary elections in May 1998. The future of state residual property is yet to be seen.
This analysis summarises first the main characteristics and results of Hungarian privatisation process as the precondition of managing the residual state property. The second section gives the inventory of the different controlling institutions and describes the positive and negative features of their activities. The last section presents the alternatives of state asset management considered in Hungary for the post-privatisation period, including the possibilities of further privatisation transactions.

Country paper for C.E.E.P.N. research project on management of residual state property, June 1998

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