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A decision of first instance has been made in the Malév case. It revealed that the Budapest-Capital Regional Court had found the former chairman of the board of directors of the Hungarian airline and one of its former CEOs guilty. The defendants caused a total financial loss of more than HUF 800 million (EUR 2 million) to the Hungarian airline, which went bankrupt in 2012. The verdict is surprisingly light by comparison.
No specific names were disclosed, but the indictment revealed several details, reports Világgazdaság. One of the defendants in the case, the former chairman of the board of Malév Zrt., in breach of the rules governing his fiduciary duties, had instructed his fellow defendants, the two former CEOs of the Hungarian airline, to conclude consultancy contracts with a company in which he had an interest.
In accordance with the instructions of the majority shareholder chairman, the other two defendants, also in breach of the rules governing their fiduciary duties, concluded a total of three consultancy contracts with the designated company in 2007 and 2008. On the basis of these contracts, Malév subsequently paid the fees for the contracts without actually fulfilling them. This may have occurred because one of the CEOs issued false certificates of performance for consultancy tasks not actually carried out.
The sums involved were not small: the defendants, by these acts, had contributed to the bankruptcy of the Hungarian airline in 2012, in total of more than HUF 800 million (EUR 2 million).
The chairman and the CEO, who had issued false performance certificates, transferred the funds to companies of their own interest, which used them in the course of their business activities.
Malév was the flag carrier of Hungary from 1946 until 2012. Photo via Wikipedia
In the prosecution indictment, the case was classified as a misappropriation of assets amounting to hundreds of millions of euros.
The Budapest-Capital Regional Court found the former chairman guilty as an instigator and the former CEO guilty of the offenses of continuous misappropriation of funds and money laundering, causing particularly significant financial loss.
In comparison, the consequences are rather mild. Both defendants were sentenced to two years’ imprisonment and a fine of only HUF 1 million (EUR 2,632). The court suspended the prison sentences of both defendants for four years, and banned them from holding executive positions in companies for five years. The third co-defendant was acquitted of the charges for lack of evidence.
However, the decision is not final.
The Office of the Prosecutor General of Budapest has appealed for an aggravation of the defendants’ sentences: it wants to impose a custodial sentence to be served and a ban from public office, as well as an increase in the amount of the fine. In the case of the third Malév manager, who was acquitted, the prosecution is appealing for a finding of guilt and a sentence.
Via Világgazdaság, Featured image via Facebook/Reptérlátogatás