Tag Archives: Tura

Hungary as the Orbán family’s private estate

It was almost a year ago that I wrote a post about the then newly launched real estate business of Prime Minister Viktor Orbán’s son-in-law, István Tiborcz.  The young man, when he was barely out of law school, set out to become an entrepreneur. He became part owner of what would soon become a thriving, highly profitable business specializing in LED street lighting technology. His family connection to the prime minister practically ensured his success. One city after the other signed contracts with his firm to modernize its street lighting with funds that came from the European Union. All went well until OLAF, the EU’s anti-fraud office, started to investigate. Tiborcz quickly sold his share in the business and moved on to safer pastures. He and his foreign business partners, like the Saudi Gaith Pharaon and the Turkish Suat Gökhan Karakus, began buying up run-down but valuable pieces of real estate. They especially liked stately mansions.

One of their first purchases was the Schossberger Mansion in Tura, about 50 km from Budapest. Although Tiborcz tried to hide his presence in the company, within a few days 444.hu learned that he was one of the new owners of the mansion. Angelina Jolie so admired the mansion that she used it as one of the sets for her movie “In the Land of Blood and Honey.” Although the purchase price was low (280 million forints), fixing up the place will be a very expensive undertaking. Ten years ago the estimated price was 6 billion forints or $203 million. After seeing a 10-minute video tour of the interior, I’m convinced that the cost of renovating and modernizing the place will be much higher than this old estimate.

Of course, we have no idea of the size of Tiborcz’s stake in this business venture, but it is most likely substantial because sometime in the spring of 2016 Győző Orbán, father of the prime minister, showed up and spent a whole day looking around. As a young man from Tura told the reporter from Bors, “it took a long time because he was shown everything inside.” As far as the locals know, the new owners want to use the former mansion as a luxury hotel.

Work began in March 2016, first on the ten hectare park that surrounds the mansion. By September the workers began refurbishing the interior as well. The mansion, which used to be open to the public as a tourist attraction, had to be closed. Some of the locals were sorry that the castle will be transformed into a luxury hotel, but others were convinced that the Orbán connection will do miracles for the sleepy little town of 8,000 inhabitants.Until now Tura was forgotten by the Orbán government. As a local man told HVG’s reporter: “We will have something here only if Viktor Orbán wants it.”

It looks as if Viktor Orbán, now that his son-in-law is part owner of the Schossberger Mansion, wants it. Tura has hit the jackpot. According to estimates, in the next year or two perhaps as much as 20 billion forints’ worth of investment will arrive in Tura.

In May several online news sites reported that a 2.7 MG geothermal power plant will soon be built. It will produce electricity for 800 houses and will also eventually heat greenhouses on 11 hectares. The water temperature of the geothermal well is 129°C. After this incredibly hot water is used to generate electricity, it cools down to 70°C and will then be used to heat the greenhouses. The water, once it has finished its heating cycle, will be returned underground, an EU requirement. The power plant will cost 5.5 billion forints, half of which will come from the European Union and the rest from a consortium of domestic investors.

Tura until now couldn’t offer much to visitors, but its fortune will soon change thanks to the Orbán family.

By late June work began on the power plant. It is being built by KS Orka Renewables Pte Ltd. of Singapore using technology from Iceland, where 90% of the buildings are heated geothermally. The first greenhouses, which will most likely be ready within a year, will occupy 5.5 hectares at a cost of 2.3 billion forints. Again, half of this sum will come from Brussels. Later, other greenhouses will be built, occupying another 5.5 hectares. Altogether the greenhouse project will cost 4.5 billion forints. The greenhouses are expected to produce 6,300 tons of tomatoes, most of which will be for export. The hope is that the greenhouse businesses will be able to amortize the initial investment over six or seven years. The investors project an eventual annual profit of about seven billion forints. In addition, the greenhouses are expected to employ 170 people. It sounds like a terrific project, assuming the projections are halfway realistic.

But surely, it cannot be a coincidence that Tura suddenly became the recipient of all this largess. The investments were declared to be “priority projects,” meaning urgent and important for the national economy. I should add that most of the money comes from three banks: Eximbank, MKB, and Gránit Bank. The first bank is state owned; MKB is apparently owned by someone close to Fidesz and Orbán; and 49% of Gránit Bank belongs to the Hungarian state. Thus, projects that will make the Schossberger Mansion business venture of Orbán’s son-in-law more viable are being financed mostly by the Hungarian state. It is easy to become a millionaire this way.

January 3, 2017

The latest business venture of Orbán’s son-in-law

István Tiborcz, Viktor Orbán’s son-in-law, pretty well disappeared from the spotlight once OLAF, the European Union’s anti-fraud office, started to investigate his firm, Elios Innovatív Zrt. The firm specialized in LED street lighting technology and practically cornered the market: one city after the other signed contracts with Elios to modernize its street lighting with funds that came from the European Union. With the EU investigation pending, Viktor Orbán and his son-in-law decided that it might be wise for Tiborcz to “sell” his share of the business to Attila Paár, a well-off businessman with excellent connections to the Orbán government.

Only once, in December, did Tiborcz get any media coverage. The story was about Elios’s work in Zalaegerszeg, which seems to have been less than satisfactory. In some parts of the city it is pitch dark, while in others pedestrians have difficulty navigating because the streetlights shine only on the road, leaving the sidewalks practically unlighted. Complaints poured into city hall, which the mayor, naturally a member of Fidesz, “tried to handle discreetly.”

Now the Tiborcz family is back in the news. It seems that István Tiborcz might be one of the investors who purchased the Schossberger Mansion in Tura, which has been described as the most beautiful castle in Hungary, comparable only to the palaces along the Loire River in France.

Who were the Schossbergers? Not much can be learned about them online, but William O. McCagg, Jr.’s Jewish Nobles and Geniuses in Modern Hungary provides quite a bit of information about the family, who were originally from Moravia. The first Hungarian Schossberger who settled in Pest in 1833 was Lázár. His son, Simon Vilmos Schossberg, was the first unconverted Jew to receive nobility from Franz Joseph, in 1863. In 1873 Simon’s son Zsigmond purchased 13,000 hectares from Prince Miklós Esterházy. Ten years later he commissioned a neo-Renaissance mansion based on the plan of Miklós Ybl, one of Europe’s leading architects in the second half of the nineteenth century. Ybl’s best known work is the Hungarian State Opera House (1874-1884).

schossberger

The Schossberger Mansion

After 1944 the mansion was used by the Germans and the Soviet troops. It then became an elementary school. After the regime change it was sold twice, but no one did anything with the building, which would need serious renovation.

Last October a mysterious new buyer showed up: TRA Real Estate Kft., a brand new joint stock company headed by Dr. Judit Tóth. TRA Real Estate Kft. is the parent company of BDPST Ingatlanforgalmazó és Beruházó Zrt., owned by Judith Tóth and Loránd Aurél Szabó, both lawyers. The new buyer wanted to be sure that the city of Tura didn’t have the right of first refusal and therefore sent the law firm of Endre Hamar to approach the city.

It is here that one becomes suspicious. First, Hamar got in touch with the town of Tura on September 7 in the name of TRA, when the firm didn’t yet exist. It was established only a week later. Second, Endre Hamar is a former business partner of István Tiborcz. Third, Hamar’s law firm might exist only on paper. It is ostensibly located in the same building as the headquarters of Elios Zrt. BDPST Ingatlanforgalmazó, which is linked to TRA, also has the same address. As 444.hu notes, Endre Hamar cannot have too many clients, considering that his firm has no website and one cannot even find the firm’s name on the list of businesses renting office space in the building.

Meanwhile, the deal took place. Whoever bought the mansion paid 200 million forints, including a 80 million forint mortgage, to the Széchenyi Bank.

When the the Schossberger Mansion was purchased, the transaction couldn’t be directly linked to István Tiborcz. But three days ago 444.hu found out that it was István Tiborcz himself who paid the 100,000 forint excise tax on August 14, at the time of BDPST’s registration as a new business. What is still a mystery is where TRA Kft. got the millions of forints that it spent on the mansion in Tura. Neither Judith Tóth nor Loránd Aurél Szabó has any other business venture that could fund the purchase.

If Tiborcz is behind BDPST Zrt., he might also have interests in other real estate ventures because BDPST is the part owner of two other businesses dealing with real estate, AMX HS and AMX Nador House. The CEO of both companies is a wealthy Turkish businessman, Suat Gökhan Karakus, who resides in Budapest. The other part owner of these companies is HBRE International Investments B.V. of Amsterdam.

On January 8 Együtt (Together) released a communiqué in which the party asked István Tiborcz and Ráhel Orbán to come forward and explain the source of their wealth. I think Együtt can wait for the day when anyone in the Orbán or, by extension, the Tiborcz family reveals the source of their rapid enrichment. Of course, it would also be nice to know where the 2 million euros came from that Lőrinc Mészáros just invested in the NK Osijek football club. That would be quite a job, not just for an investigative journalist but for a whole slew of the best detectives in Europe and the Americas.