Controversial Hungarian company made record profit from state commissions

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While the Hungarian police, the anti-fraud authority of the EU and European Commission investigates the procurements won by Elios Plc. and funded mostly by the EU, the company previously owned by István Tiborcz, the son-in-law of Viktor Orbán had its best year financially. According to registry court data the company had a record profit in 2015, and the the current owns decided to take out 3,1 million euros in dividends.

Elios Plc. was founded by István Tiborcz and Bálint Erdei and changed owners multiple times already. The company became famous after winning dozens of public lighting projects under suspicious circumstances in many Hungarian towns. In the spring of 2010 the founders sold their ownership and became board members, but in 2014, right before the company started to win procurement after procurement, they bought back their share. However, Tiborcz sold his ownership again 2015, according to a pro-government daily because of the continuous attack against his person and his family.

The buyer was WHB Investment Ltd, a company in the interest of a billionaire businessman, Attila Paár. Paár’s construction companies worked on multiple state project in the last few years.

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The other half of Elios was still in the hands of the other founder, Erdei up until January 14 this year, when Erdei also sold his ownership to Paár, so WHB investment was entitled for the full dividend. The amount paid for Elios is not stated in the publicly available documents.

Last year Elios’ net revenues amounted to 24,8 million euros, almost the double of the 11,3 million euros revenue in 2014.  The company won on 21 public procurements in the total amount of 17,4 million euros in 2015, so most of its profit came from public commissions.  Out of the 21 procurements only 6 wasn’t connected to public lighting modernization. We wrote several articles about these controversial LED-lamp projects, which were mainly funded by the EU.  Partly as a consequence of our articles, the anti-fraud authority of the EU, OLAF started an investigation in the matter. Our media partner, 444 was informed that the EU haven’t yet paid for the LED-lamp projects because of the controversy. If the Commission finds irregularities it may fine Hungary and will not reimburse state for the project. This, however, doesn’t concer Elios, because the company was already paid from the central budget.