MOL stands for Hungarian Oil and Gas Public Limit Company. Although it is a publicly traded company, the Hungarian government considers MOL a company of "strategic importance." Therefore there was quite a stir when OMV AG, Central Europe's biggest oil company and Austria's largest publicly traded firm that had a 21.2% percent stake in the Hungarian refiner MOL, sold its stake to Russian crude producer Surgutneftegaz. Surgutneftegaz is the fourth largest oil company in Russia. One analyst (Derek Brower) called it "one of Russia's most opaque and politically connected energy firms." Apparently Surgutneftegaz wanted the MOL stake very badly because it paid €1.4 billion. According to OMV the settlement price was €63.10 a share, almost a 100% premium to MOL's closing stock price of €32.70 just before the deal was announced.
At the time that OMV wanted to have a majority stake in MOL in 2007, the Hungarian government intervened. Parliament passed a law that became known as Lex MOL. It allowed the government to limit the impact of foreign company ownership on the company's management. For example, although OMV owned more than 20% of the company, its voting rights were restricted to 10%. OMV considered Lex MOL illegal and went to Brussels to fight the legislation. The case is still pending.
If Hungarians were nervous about an Austrian company owning part of its natural resources, just imagine the upheaval that ensued when the news hit that OMV had sold its stake to a Russian company whose ownership is murky. Some people even claim that Vladimir Putin is among the owners. The new prime minister, Gordon Bajnai, immediately reacted and told Reuters on April 17 that "as the Hungarian government did not welcome the approach of OMV . . . it is also unhappy with another company's entry through a step that has not been coordinated with" the Hungarian authorities. MOL immediately denounced the purchase. Both the Hungarian government and its opposition parties rallied in support of MOL's independence. The Russian foreign ministry said that Hungary was unnecessarily politicizing the deal. In fact, the ministry said that Hungary should welcome Russian investment in MOL since it showed the willingness of Russian companies to broaden their economic ties with Europe.
For better or worse the purchase is done, but the political reverberations are far from over. Earlier János Veres, then still minister of finance, claimed that the Hungarian government didn't know anything about the impending deal. The opposition first attacked the government for its incompetence: how is it possible that a country that has national security services, not one but several, has no information on negotiations between Sugarneftegaz and OMV AG? As it turned out, a few days before the deal was finalized the government got wind of the deal. However, the new minister in charge of the national security office claims that they couldn't do anything about it. I'm no contract or securities lawyer, but I believe this to be the case. Once OMV AG had a defined stake in MOL, they had control over their position. They could hold onto it or sell it to the highest bidder. Basic principles of the free market. Nonetheless, István Simicskó (KDNP = Christian Democratic People's Party, ally of Fidesz), chairman of the committee on national security, came out with a two-pronged accusation: first, the government lied about their knowledge of the deal; second, the Hungarian government could have prevented the sale.
The situation is complicated because all this information falls under the category of state secrets. So if Simicskó and later Ervin Demeter, former minister of national security, are not simply bloviating, how did they they know what the government knew and when they knew it? Perhaps earlier accusations that Fidesz maintains illegal surveillance over the activities of the government's national security office are well founded. Károly Tóth (MSZP), vice chairman of the parliamentary committee, is outraged; he claims that Fidesz and KDNP members of the committee knew everything before Ádám Ficsor, the new minister, informed them of the details. Apparently they were reading questions and answers from a previously prepared script. According to Tóth, the whole scenario was planned well in advance. The best proof, he claims, is that Ervin Demeter at one point told his fellow Fidesz member that "this question shouldn't be addressed now, only after the next answer." How can they be so well informed that they don't even have to wait for information coming from the government? They know all the answers ahead of time. Tóth suggests that perhaps there should be an investigation. Perhaps so, but by now I'm convinced that it will achieve absolutely nothing. Fidesz is invincible.