Tag Archives: Magyar Kereskedelmi Bank

The fate of a journalist, Gergely Brückner, who told the truth

Népszabadság is not the only Hungarian publication that has been harassed by the authorities, although its shutdown on October 8 was the Orbán government’s bluntest attack on the Hungarian media. Shortly after the destruction of Népszabadság came an assault on a journalist who had investigated one of the Orbán government’s dubious financial transactions. This time the Hungarian National Bank “filed a complaint against an unknown perpetrator,” actually Gergely Brückner, a highly regarded journalist at Figyelő (Observer), a financial weekly whose most important articles are unfortunately not available online. Kolos Kardkovács, head of the central bank’s legal department, filed charges against him for “infringement of trade secrets” in connection with the purchase of MKB Bank. The article Kardkovács objected to appeared in Figyelő’s very first issue in January 2015.

Let’s backtrack a bit to mid-December 2014 when I wrote a post titled “The first state-owned Hungarian bank is already in trouble.” MKB Bank was supposed to be sound since its former owner, Bayerische Landesbank, prior to the sale pumped 270 million euros into it. This was supposed to be enough to cover all possible losses over the following few months. Government officials were sure that the bank would be profitable by 2016 “at the latest” and that “the reorganization of MKB Bank will not burden either the state or the taxpayers.” Yet three months later Viktor Orbán and György Matolcsy, at a joint press conference, said that 300 billion forints are urgently needed to keep MKB Bank afloat. Orbán announced that since “the consolidation of MKB Bank will be done by the Hungarian National Bank, it will not cost the budget or the Hungarian taxpayers anything.” The same lie that was used to justify the establishment of the central bank’s foundations.

Between September and December 2014 Brückner gathered background information for a series of articles on the less than transparent purchase of MKB Bank. During 2015 and 2016  he published at least a dozen articles on the reorganization and eventual sale of MKB Bank to several investors of, again, less than transparent identity.

The decision of the National Bank to file charges against him, however, is based on a single sentence from his initial reporting. The sentence reads: “Our paper has learned that shortly after Lázár became the owner [of MKB Bank] he received a letter from Matolcsy in which the bank president indicated that even in the short term tens of billions of forints will be necessary in order to avoid bankruptcy and that may not be the end of the reckoning [cech]. (Our sources talk about 75 billion forints and later another 200 billion capital increase).” The Hungarian National Bank never denied any of the information provided by Brückner about MKB Bank. They never asked for a correction. Nothing. But suddenly, 22 months later, they discovered that Brückner is guilty of the infringement of business secrets.

Gergely Brückner

Gergely Brückner

Brückner did what a good journalist should. He pointed out that the purchase of MKB Bank was a very bad deal, for which the Hungarian taxpayers have paid dearly ever since September 2014. Whoever sealed the deal either didn’t exercise due diligence or, what in my opinion is more likely, Viktor Orbán was so eager to acquire a foreign-owned bank and transform it into a bank which would eventually be in Hungarian hands that he simply didn’t care about the exorbitant amount of money it would take “to reorganize” it.

The policemen who questioned Brückner demanded that he reveal his sources, which he refused to do. Later he said that in fact he no longer remembers who his source was for this particular piece of information. He had conversations with at least 15 men and women who had information about the case both in Hungary and in Bavaria. He didn’t think this sentence was of any great significance and therefore paid no special attention to it. It was the overall picture that interested him, that the purchase of MKB Bank was a very bad business deal.

This case is yet another example of the warped legal system in Hungary and of the government’s attempt to clamp down on media criticism. Although scores of people have filed complaints in connection with the shady affairs of Antal Rogán and György Matolcsy, neither the police nor the prosecutors move a finger. Their usual answer is that there is no reason to investigate. But if a journalist accurately reports on a disastrous bank purchase, the police are ready to jump and insist that he reveal his sources, which according to current Hungarian law are protected. We don’t yet know whether the investigative judge will decide to go forward with the case.

János Lázár, who can quite often surprise us, once again did so in this case. Last Thursday at his usual press conference he expressed his disapproval of harassing journalists, pressuring them to reveal their sources. I think it’s safe to assume that he was not himself the source; that is, he presumably did not make public the letter he received from Matolcsy. But the information must have come either from his office or from Matolcsy’s, perhaps too close for comfort.

How badly have Hungarian taxpayers been burned by the deal? It had to be a colossal loss. The bank into which 300 billion forints was poured, over and above the 35 billion purchase price, was sold in March 2016 for 37 billion forints. It was sold to a consortium of domestic and foreign equity funds, with Hungarian owners getting a majority stake. One member of this consortium is a Hungarian private equity fund called Metis, which will have a 45% stake in MKB Bank. Metis was launched only recently with a registered capital of 100 million euros. The other prominent member is Blue Robin Investments SCA, whose owners are apparently Indian and Chinese investors. It will also own 45% of the bank. A Hungarian pension fund will hold the remaining 10% of the shares.

By July Brückner learned that “the most important and real owner” behind Metis is László Szíjj, owner of Duna Aszfalt, which people usually refer to nowadays as the new Közgép. Közgép was Lajos Simicska’s firm, which in the past used to receive most of the government contracts. Now that Simicska is one of the chief enemies of Viktor Orbán, his place has been filled by a number of oligarchs, one of whom is Szíjj.

One more thing about Figyelő. Although the weekly is profitable, it is up for sale because of an acrimonious ownership dispute that has been going on for about two years. The journalists who work at the weekly are almost certain that the new owner will be Mária Schmidt, the court historian and director of the House of Terror who became a very wealthy woman after the unexpected early death of her husband. If Schmidt does indeed become the owner, I’m sure Gergely Brückner will quickly become “redundant.”

November 1, 2016