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Brokerage Saga Continues As PM Defends Decision To Withdraw Taxpayers’ Money From Quaestor

Tamás Székely 2015.03.27.

Hungary needs a modern treasury system which ensures that public funds, including local government funds, are “parked” under appropriate conditions, PM Viktor Orbán told public radio in his regular Friday morning interview. It was the right decision to take steps to save taxpayers’ money after the collapse of Buda-Cash brokerage, after which the government immediately decided to stop the risky practice of keeping taxpayer money at brokerages, he insisted. Orbán confirmed that he had received a letter from Quaestor, addressed directly to him, and its contents were identical with the announcement the firm made to the central bank.

Orbán said after receiving the letter he instantly forwarded it to Economy Minister Mihály Varga, and asked him to contact the brokerage. Asked if he had decided to withdraw the “risky investment” before that letter from the brokerage arrived, Orbán said the decision had been taken “well before”. Speaking to public television later, Orbán said that on 25h of February he had given instructions for ministers to see if there was money held in “risky places” and if this was the case, the money should be withdrawn immediately. The withdrawal of funds from Quaestor took place two weeks before the scandal broke out at the brokerage.

Meanwhile Quaestor brokerage owner Csaba Tarsoly was arrested late on Thursday and heard as a suspect in connection with fraud at the brokerage. President-chief executive Tarsoly informed the National Bank of Hungary on March 9 that Quaestor was filing for bankruptcy due to an excessively high demand for selling the company’s bonds. The central bank ordered an oversight commissioner to head Quaestor while the brokerages activities were suspended. News portal hvg.hu said that Tarsoly had been replaced at a general meeting on March 16 by Béla Orgován, with an address listed in the village of Tápióság, according to the minutes.

Locals in the village, east of Budapest, said Béla Orgován had never finished secondary school and had been unemployed most of his life. The opposition earlier charged that Quaestor was linked to ruling Fidesz since Tarsoly was also the owner of a the Győr ETO club, a board member of the Hungarian Football Federation and a “close acquaintance” of PM Viktor Orbán. The foreign ministry has denied allegations that the government had helped Tarsoly to “lucrative deals” in connection with Quaestor’s trading house in Moscow.

Meanwhile Budapest’s chief prosecutor said that around 68 billion forints (EUR 226m) in assets had been secured in the Buda-Cash brokerage case, which preceded the outbreak of the Quaestor scandal. The assets are offering hope for compensation for all of the brokerage’s clients who suffered damages, Tibor Ibolya said.  The assets include real estate, business stakes, bank accounts, moveable assets and cash and the Police detectives also uncovered about 62 billion forints of damages, he added.

The National Investigation Bureau (NNI) launched the investigation into the Buda-Cash case on 23rd of February based on claims filed by the deputy governor of the central bank. Suspects were questioned and arrests were made on March 9 on suspicion of high-value fraud and other crimes, Ibolya said. The suspects have appealed to the Municipal Chief Prosecutor. Three people implicated in the Buda-Cash bankruptcy are now held in pre-trial detention.

via hungarymatters.hu and MTI photo: Péter Kollányi – MTI