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Two companies linked to recent, suspicious projects of the Fidesz-government’s circles, have been recently dissolved. The first one is the prime minister’s son-in-law former company, Elios, which had been involved in a streetlamp project, in which the European Anti-Fraud Office smelled corruption. The other company in question made significant profit from the controversial and suspicious ventilator procurement of the Foreign Ministry amidst the coronavirus outbreak. 

Elios Case

As we previously reported, the European Anti-Fraud Office (OLAF) announced in February 2018 that it had uncovered “serious irregularities” and “conflicts of interest” related to an EU-funded streetlamp project which were won by a company half-owned by István Tiborcz, the prime minister’s son-in-law. Earlier, Elios had also been in hot water for the quality of the work done.

While the Hungarian authorities haven’t found irregularities one year later, the government still decided to leave the Elios project out of those financed by the EU, meaning that Hungarian taxpayers had to eventually settle the bill for the project, which came to HUF 13 billion (EUR 36.3 million).

According to the opposition, it was nothing else than a confession that Tiborcz’s business interests appropriated EU funds in an illegitimate and corrupt way.

Tiborcz reportedly left the company back in 2015 (his legal involvement had been changing in the company between 2009 and 2015), while news about the firm’s dissolution without legal succession was made public a few days ago.

Following Controversies, Govt Gives up on EU Money for Elios Projects
Following Controversies, Govt Gives up on EU Money for Elios Projects

In the midst of an election campaign in February of last year, the European Anti-Fraud Office (OLAF) announced it had uncovered “serious irregularities” and “conflicts of interest” related to an EU-funded street lamp project. The project’s contracts were won by a company partially owned by István Tiborcz, Prime Minister Viktor Orbán’s son-in-law. The story seemed […]Continue reading

In addition, another company in the center of the aforementioned Elios case, (called Sistrad, belonging to Tiborcz’s classmate) has undergone the same dissolution procedure in April of this year.

Overpriced ventilator procurement

Hungary largely overbought ventilators amidst the coronavirus outbreak. While the Foreign Minister explained the process of procurement under “wild-west like circumstances,” (even the United Kingdom, with five times more residents had bought less), their prices and other middle-man companies were the ones that raised suspicion and led to controversy in some instances.

Firstly, it was proven that Hungary paid a lot more for these devices than other countries. In addition, the Foreign Ministry paid twice the price for one that the state hospital provider did. Moreover, while the hospital provider bought most of them from professional companies, among the Foreign Ministry’s partners there are several untraceable Chinese, Hong-Kong, or Malaysian companies).

The transactions with one of the companies, Fourcardinal (with a Hungarian background), is a particularly salient example.

Válaszonline revealed Fourcardinal’s link to the Fidesz government: as a matter of fact, the company’s former managing director is linked to Zsuzsanna Rahói, Viktor Orbán’s chief advisor on international affairs. Previously, she appeared aiding and assisting Ráhel Orbán (the Prime Minister’s daughter) and her husband, [aforementioned] István Tiborcz too.

What is more, a company called Silk Road Fund (where one of the owners gained wealth during the left-liberal governments and is undergoing criminal proceedings on corruption allegations, while another is close to the governing circles) entered in the company’s ownership exactly on the same day when the Foreign Ministry’s order for 1,000 Chinese ventilators came in, as the government-critical conservative outlet uncovered.

Ventilator Purchases: Potential Police Investigation in Hungary After Scandal in Slovenia
Ventilator Purchases: Potential Police Investigation in Hungary After Scandal in Slovenia

Ágnes Vadai, Member of Parliament for opposition party Democratic Coalition (DK), turned to Péter Polt, the Chief Prosecutor, with questions about the ventilators purchased at an average price of HUF 10 million during the coronavirus crisis. Polt forwarded the questions to the police in a report, so an investigation will probably be launched into the […]Continue reading

Thanks to the giant business, worth some HUF 17 billion (EUR 47.3 million), the company increased its turnover 216-fold in a year. Meanwhile, this deal apparently wasn’t something vital in terms of fighting Covid: it was broken in the second half of April, and up until then some 22 other contracts had already been made for ventilator purchases.

So in the latest developments, since the owners have taken out a total of HUF 15.4 billion (EUR 42.9 million) as dividends from Fourcardinal, they decided to dissolve the company altogether, without any legal succession as of September 1st of this year.

featured image: PM Orbán and his son-in-law István Tiborcz