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Financial Fraud: Travel Agency In East Hungary May Have Caused 20 billion Forints Losses

Tamás Székely 2015.04.19.

According to István Dobrossy, lawyer of the furious Kund-Mediátor clients, the losses caused by the travel agency can be between 5 and 20 billion forints. The National Bank of Hungary (MNB) said earlier that it launched an investigation of travel agent Kun-Mediator for converting money without a licence. The MNB looked into the matter on the basis of “market signals” and started coordinating with the police, who had received reports involving Kun-Mediator.

A number of people waiting in front of Kun-Mediator’s branch in the town of Karcag told public news channel M1 in the morning on Wednesday that the company had offered financial services. Mayor László Dobos told M1 that 195 reports involving the company had been made to the police so far. The police announced on Tuesday that an investigation on suspicion of embezzlement had been launched against a “company undertaking financial activities” after several reports were made to the Karcag police. The location of the company’s managing director is now yet known, the police said. However, according to the lawyer of the clients, he has arrived back to Hungary.

Economy Minister Mihály Varga instructed the Hungarian Commercial Licencing Office to review KunMediator’s travel agent activities immediately, the ministry said on Wednesday. “The case of Kun-Mediátor is the responsibility of the financial system and those who have committed these frauds and abuses,” government spokesman Zoltán Kovács told later public news channel M1. Referring to the recent brokerage scandals, he said all the financial scandals seem to be criminal cases, and they are all being investigated. He said the government trusts that the funds will be recovered to provide coverage to settle the claims. Kovács noted that Economy Minister Mihály Varga had submitted to parliament a proposal to strengthen the oversight of financial organisations. The proposal would give several new powers to the National Bank of Hungary (NBH) and other organisations, he said.

Meanwhile the Hungarian Parliament approved a law on setting up a fund to compensate people who suffered losses because of the bankruptcy of brokerage firm Quaestor. In line with the law approved with 185 votes for and 5 against, compensation can be claimed between May 6 and June 5. The law covers transactions involving bonds issued by Quaestor Financial Hrurira and sold by Quaestor Securities Trading and Investment or associated businesses. Under the law, the Quaestor Victims Compensation Fund, in conjunction with the Investment Protection Fund (Beva), will hand out up to 30 million forints per client in compensation. This is significantly higher compensation than clients could realistically expect to receive through individual court cases or in a liquidation procedure, according to the reasoning of the law.

via, MTI and photo: Zoltán Máthé – MTI