Hungarian city moves to oust Suez water management

BUDAPEST Oct 27 (Reuters) - The Hungarian city of Pecs will call an extraordinary general meeting to remove the management of the local water utility appointed by French minority owner Suez Environnement (SEVI.PA), the town's mayor said on Tuesday.

Mayor Zsolt Pava said in a statement that the decision was based on "strong suspicion of instances of fraud" committed at water works Pecsi Vizmu Zrt, in which the municipality holds a majority stake. Suez, based on a 1995 deal, holds 48 percent in the firm.

Pecsi Vizmu Zrt denied the charges in a statement published on its website.

Suez said in a statement that the municipality of Pecs refused co-operation to resolve a standoff.

"These accusations are shocking and unacceptable," Suez said.

The move comes after Pecs closed off the premises of the water utility last month and locked out the management after terminating a service contract with Suez Environnement effective Sept. 30.

Pecs wants to buy out Suez from the water works.

Earlier this month, Suez Environnement said it planned to take legal action against the municipality. [ID:nL5104173]

(Reporting by Gergely Szakacs, Editing by Sitaraman Shankar)