Responsibilities <\/strong><\/p>\nThe story began with a resounding plan. In the summer of 2018, SZTA announced the launch of the Nemzeti T\u0151zsdefejleszt\u00e9si Alap (National Stock Exchange Development Fund) with the aim of facilitating the stock market entry of small and medium-sized companies. The fund had a budget of 13 billion forints, provided by the Ministry of Finance to SZTA. The role of SZTA as the fund manager was to invest this money in a way that met the fund\u2019s objectives (i.e., to assist companies in going public) and to generate returns for the investors, ultimately the Hungarian taxpayers.<\/p>\n
\u201cThe SZTA is anticipated to be an active participant in the stock market appearance of companies as early as this year,\u201d SZTA wrote in a summer 2018 blog post, highlighting the fund\u2019s \u201cattractive\u201d features.<\/p>\n
However, instead of a success story, the project quickly turned into a colossal failure. Just months after the fund\u2019s launch, a series of decisions led to the loss of billions.<\/p>\n
According to internal documents obtained by Direkt36, the 13 billion forints received from the Ministry of Finance were first entirely transferred to SZTA\u2019s account at OTP Bank in June 2018. However, a few weeks later, in early August, the company decided to transfer half of the money, 6.5 billion forints, to N\u00f6veked\u00e9si Hitel Bank (NHB), where it was then placed in various term deposits. In other words, they committed not to touch the money for a certain period and allowed the bank to manage it.<\/p>\n
Soon after, they decided to transfer even more money to NHB. On August 17, they released the 6 billion forints remaining at OTP Bank and later placed further deposits at NHB.<\/p>\n
Despite it being evident that there were problems with NHB, SZTA continued to transfer increasingly larger amounts to the bank. On July 25, 2018, two weeks before the first term deposit, the Hungarian central bank imposed a 3.9 million forint fine on NHB for failing to fulfill their data reporting obligations.<\/p>\n
A few weeks later, it became clear that issues at the bank were far more serious than data reporting. On August 14, the central bank issued a decision imposing a 19 million forint fine on NHB for various deficiencies. The decision detailed on five pages what the bank needed to rectify for proper operation.<\/p>\n
These warnings and fines did not deter SZTA from committing even more to NHB. According to the leaked documents, in September, October, and November 2018, they placed a total of approximately 5 billion forints in deposits at the bank.<\/p>\n
Meanwhile, despite the fines and warnings, things did not improve at NHB. The situation was deemed so serious by the Hungarian central bank that in December 2018, a supervisory commissioner was appointed to the bank, and limited withdrawals from\u00a0deposits that can be withdrawn within thirty days to HUF 7 million.<\/span>. This meant that larger amounts could not be withdrawn from NHB, leaving billions of taxpayer forints managed by SZTA stuck in the bank.<\/p>\nFamily businesses<\/strong><\/p>\nThe supervisory measures imposed on the bank at the time caused a significant stir, as NHB had strong political connections.<\/p>\n
Since 2013, the financial institution had been owned by Tam\u00e1s B\u00e9la Szemerey, a cousin of Gy\u00f6rgy Matolcsy, the former Minister of National Economy and current president of the Hungarian central bank (MNB). For years, NHB handled businesses linked to the Matolcsy family and to MNB. In 2014, the Pallas Ath\u00e9n\u00e9 Foundations, established by MNB, deposited a large portion of the state billions they received into NHB (under very unfavorable conditions, according to a previous article by N\u00e9pszava).<\/p>\n
![\"Matolcsy](\"https:\/\/assets.telex.hu\/images\/20240617\/1718626268-temp-oLmiif_cikktorzs:xl.jpg\")
The failed bank was owned by the cousin of Gy\u00f6rgy Matolcsy, president of the Hungarian central bank. Photo: MNB<\/p><\/div>\n
In 2016, 444 reported that NHB was part of the central bank’s so-called growth loan program. This meant that the central bank first lent to banks, which then lent to businesses. According to the site, NHB mainly used this program to finance companies linked to its owner Szemerey and his relatives.<\/p>\n
The Matolcsy family also frequently utilized the financial assistance of their relative\u2019s bank. In 2015, \u00c1d\u00e1m Matolcsy, one of the sons of the president of the central bank, purchased the Balaton B\u00fator furniture company with an NHB loan, and according to previous articles by 24.hu, NHB also provided a 280 million forint mortgage loan for the luxury villa in the II. district of Budapest, where he and his father lived. According to a 2018 article by 24.hu, the villa on Kondor Street, adjacent to the property, was bought by Matolcsy’s other son, M\u00e1t\u00e9, with the help of a 90 million forint NHB mortgage loan.<\/p>\n
CEO from Matolcsy circles <\/strong><\/p>\nAs later decisions by MNB revealed, NHB was operating irregularly during this time, and thus did not handle the deposited funds with the diligence expected of financial institutions. One of NHB’s largest depositors was SZTA, whose CEO at the time, Imre V. Csuhaj, also had several connections to Gy\u00f6rgy Matolcsy and his circle.<\/p>\n
Csuhaj became a board member of several Pallas Ath\u00e9n\u00e9 Foundations, which were established by MNB during Matolcsy’s presidency and endowed with substantial assets. Additionally, since 2015, he participated in the management of Kecskem\u00e9ti Du\u00e1lis Oktat\u00e1si K\u00f6zpont (KEDO) Ltd., created to develop the Neumann J\u00e1nos University in Kecskem\u00e9t, an initiative closely associated with Matolcsy and MNB.<\/p>\n
Direkt 36 has contacted Csuhaj, who is currently serving as the chief advisor to Matolcsy at MNB multiple times, but he has declined to answer questions. \u00a0He did not address why he decided to deposit funds in NHB or whether his relationship with Matolcsy influenced this decision. Among the internal documents obtained by Direkt36, there is one that reveals Csuhaj’s version of the events. In a March 2019 board presentation prepared by Csuhaj, it was stated that they engaged with NHB because SZTA aimed to “support majority Hungarian-owned banks in line with the government’s strategy.” Previously, they had cooperated with OTP, MKB, and Gr\u00e1nit Bank, and later included NHB in this circle.<\/p>\n
According to the presentation, they did not consider it risky to transfer money to NHB because the bank did not indicate any issues with repayment.<\/p>\n
“There were no complaints about the bank’s services, and the companies\u2019 contacts did not indicate that there could be any problems with the planned reallocation of the deposited funds,” the document states, adding that “the interest conditions offered by NHB Bank Ltd. were favorable but not outstanding compared to the market.”<\/p><\/blockquote>\n
Csuhaj also explained why they were not alarmed by MNB’s August 2018 fine imposed on NHB for various irregularities. “This was not an extraordinary occurrence in itself, as other banks were also fined similarly during this period based on public information,” the presentation noted, emphasizing that MNB’s statement included that “the identified violations do not pose a systemic risk and do not endanger the reliable operation of the bank.” (Indeed, the central bank’s press release contained this sentence, but it also mentioned that “the central bank considered the numerous violations with high or significant risk ratings as an aggravating factor.”)<\/p>\n
Csuhaj did not elaborate in the presentation on why they made further deposits in NHB even after the fine was announced. However, he emphasized that they tried to reduce their exposure to the bank at the end of 2018. He stated that on December 7, 2018, they “reallocated 1.4 billion forints, which was placed with OTP Bank Nyrt.,” essentially returning the money to the bank where it was originally held.<\/p>\n
The presentation indicated that they planned to continue withdrawing the funds, but they were no longer able to do so. On December 18, MNB announced the appointment of a supervisory commissioner and restricted depositors to withdraw a maximum of 7 million forints every 30 days.<\/p>\n
This severely impacted SZTA. Since MNB’s restriction only applied to deposits, they could transfer 2 billion forints held in stocks to OTP, but 6.8 billion forints in deposits remained stuck. (It did not help the big picture that Csuhaj emphasized in the presentation that they took advantage of the opportunity and withdrew 7 million forints from NHB in December.)<\/p>\n
In the document written in early March 2019, Csuhaj discussed the planned schedule for withdrawing the remaining funds. However, it soon became clear that this would not be possible. On March 14, MNB announced the revocation of NHB’s license and ordered its liquidation. This meant that the liquidation process would determine when and to what extent depositors would have access to their money.<\/p>\n
We contacted Csuhaj, who currently works at MNB as chief advisor to president Matolcsy, multiple times before the article was published, but he stated that he did not want to answer our questions. Therefore, he did not respond to why he decided on the deposit placements at NHB, or whether his relationship with Matolcsy played a role in this. After the article was published, he sent a written response, in which he stated, among other things, that an agreement regarding the restructuring of the deposits with NHB was made on March 8, 2019, before the liquidation order was issued. According to Csuhaj, the essence of this agreement was that the fund managed by SZTA would tie up 5.5 billion forints in deposits until December 31, 2019, and according to the former CEO, the Ministry of Finance was aware of and approved this arrangement.<\/p>\n
Leadership responsibility<\/strong><\/p>\nCsuhaj did not remain at SZTA for long; his tenure as CEO ended in April. The subsequent leadership of SZTA continued to investigate the circumstances surrounding the missing billions, and the resulting investigations revealed that Csuhaj’s responsibility was greater than he had portrayed in his presentation.<\/p>\n
Among the documents obtained by Direkt36 is a memo prepared by the Oppenheim Law Firm on behalf of SZTA concerning the NHB case. The firm examined the potential legal claims that could be enforced and concluded that it might be justified to take action against Csuhaj, among others.<\/p>\n
“We consider the claim against the CEO based on the breach of executive obligations to be well-founded,” states the legal memo, noting that the breach of obligations particularly arose in relation to the funds deposited in NHB after MNB issued its decision on the identified problems at the bank.<\/p>\n
According to the law firm\u2019s investigation, Csuhaj breached his obligations when he moved large deposits from OTP, the country’s largest bank, to the much smaller NHB in exchange for a slight interest advantage.<\/p>\n
“In our opinion, all deposits made in NHB represent a breach of the executive obligations stemming from the executive responsibilities, regardless of the MNB decision,” the memo states.<\/p><\/blockquote>\n
The law firm examined the internal rules of SZTA and established that Csuhaj did not have the authority to make such decisions alone; the decision was within the purview of the board of directors. “However, the other members of the board were not aware of this and did not participate in the decision-making process in any way. Therefore, the lack of propriety of the decision solely raises the executive responsibility of the CEO,” the document states.<\/p>\n
In his response sent to Direkt36 after the article was published, Csuhaj denied violating any rules. ‘As the Chairman and CEO of SZTA, I complied with all laws and internal regulations when placing the deposits. This was confirmed by several supervisory inspections, as well as the subsequent decisions of the Board of Directors and the Supervisory Board. Any statement or assumption to the contrary misrepresents the actual facts and could provide grounds for legal action,’ Csuhaj wrote.<\/p>\n
The legal memo also mentions that on February 17, 2020, the fund manager filed a complaint with the prosecutor’s office against an unknown perpetrator on suspicion of embezzlement. “We are not aware that the CEO has been questioned as a witness or a suspect during the criminal proceedings,” the document states. As it turned out, there have been no significant developments since then. The Budapest police headquarters, which is investigating the case, informed Direkt36 that “the case is still ongoing, no suspect interrogation has taken place.”<\/p>\n
The minister intervenes<\/strong><\/p>\nThe internal documents reveal that as the situation worsened, the Ministry of Finance, which had originally entrusted the company with the lost funds and held the ownership rights of SZTA, became increasingly active.<\/p>\n
According to Csuhaj’s presentation, he informed the ministry leadership of the situation the day after the central bank imposed restrictions on NHB, on December 19, 2018. As Csuhaj stated, he informed “State Secretary Bal\u00e1zs R\u00e1kossy verbally and Minister Mih\u00e1ly Varga in writing through Chief of Cabinet Csaba Havasi.”<\/p>\n
![\"Varga](\"https:\/\/assets.telex.hu\/images\/20240617\/1718626308-temp-mCjPfN_cikktorzs:xl.jpg\")
The case of the missing billions was dealt with at the highest level in the Ministry of Finance. Mih\u00e1ly Varga, the minister of finance was also involved. Photo: Mih\u00e1ly Varga’s Facebook page<\/p><\/div>\n
Csuhaj then negotiated with the NHB leadership, which requested that if larger sums could be withdrawn from the bank again, SZTA should schedule their withdrawal for a longer period. The presentation noted that because the fund managed by SZTA was “the largest depositor, the future of the bank largely depended on its actions.” In other words, NHB feared that if SZTA quickly withdrew its money, the bank would face even greater difficulties.<\/p>\n
Csuhaj informed the ministry about these negotiations, which, according to the presentation, responded that no agreement should be made with NHB without the approval of the ministry’s leadership.<\/p>\n
“On January 17, State Secretary Bal\u00e1zs R\u00e1kossy indicated that any agreement with NHB Bank must await the Minister’s decision,” stated Csuhaj’s presentation.<\/p><\/blockquote>\n
The documents suggest that the ministry was sympathetic towards NHB. SZTA had devised a plan for how it would withdraw its money from the bank, proposing that they keep their funds in the bank for up to two more years. However, according to Csuhaj’s presentation, “at the request of State Secretary Bal\u00e1zs R\u00e1kossy, the Fund Manager developed a schedule for a longer term” compared to the previous one. This plan involved extending the repayment period to over two years, until July 2021.<\/p>\n
The presentation also noted that R\u00e1kossy stipulated again that “any agreement can only be signed if he, on the Minister’s decision, approves it.” However, such an agreement was ultimately unnecessary because the central bank’s decision on March 14, 2019, to liquidate NHB made any agreement futile.<\/p>\n
From that point on, both SZTA and the Finance Ministry could only hope that they would recover their money during the liquidation process. However, the liquidation turned into insolvency proceedings, indicating that the bank did not have enough funds to pay all its creditors. (This process is still ongoing according to the company register. We contacted the company handling the insolvency, but they did not provide specifics on the status of the process. Csuhaj claims that the successor of the fund managed by SZTA has already received billions in recoveries from the liquidator, but he did not state who the source of this information was.)<\/p>\n
For the ministry, the next challenge was how to replenish the money lost by SZTA, which the ministry had originally provided with the condition that it would be repaid. State Secretary Bal\u00e1zs R\u00e1kossy wrote a dire memo to Minister Mih\u00e1ly Varga, warning that if no solution was found, it would lead to a legal violation. If SZTA did not receive funding, he cautioned, “the equity would fall below the registered capital, which does not comply with legal requirements.”<\/p>\n
The leaked documents indicate lengthy discussions on how to resolve the issue. SZTA’s publicly available 2020 report eventually revealed the ministry’s solution. After summarizing the NHB investments and the resulting damages, the report notes that “in August 2020, the company’s founder decided on a significant capital increase totaling 20 billion forints.”<\/p>\n
In other words, to address the problem of the nearly 7 billion forints loss suffered by SZTA, the company received an additional 20 billion forints from taxpayers’ money. We sent detailed questions to the Finance Ministry regarding the matter, but they replied only that “the Ministry of Finance always acts in accordance with the relevant laws.”<\/p>\n
Help us tell the truth in Hungary, become a supporter!<\/a><\/p>\nThis article was updated on June 19, 2024, with Imre V. Csuhaj’s response, which he sent after the article was published.<\/p>","protected":false},"excerpt":{"rendered":"
Direkt36 uncovered another story about the operations of a state company that secretly financed several important projects of the Orb\u00e1n government. Internal documents reveal in great detail how nearly 7 billion forints got stuck in the failed bank of Gy\u00f6rgy Matolcsy’s cousin.<\/p>\n","protected":false},"author":34,"featured_media":11303,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"single-telex.php","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[215,225,677,644,651],"ppma_author":[611,522],"aioseo_notices":[],"fimg_url":["https:\/\/www.direkt36.hu\/wp-content\/uploads\/2024\/06\/tokealap.jpg",2250,1500,false],"authors":[{"term_id":611,"user_id":34,"is_guest":0,"slug":"golya-agnes","display_name":"\u00c1gnes G\u00f3lya","avatar_url":{"url":"https:\/\/www.direkt36.hu\/wp-content\/uploads\/2024\/02\/Golya-Agnes.png","url2x":"https:\/\/www.direkt36.hu\/wp-content\/uploads\/2024\/02\/Golya-Agnes.png"},"author_category":"","user_url":"","last_name":"G\u00f3lya","first_name":"\u00c1gnes","job_title":"","description":"[:hu]A Sz\u00ednh\u00e1z-\u00e9s Filmm\u0171v\u00e9szeti Egyetem telev\u00edzi\u00f3s m\u0171sork\u00e9sz\u00edt\u0151 szak\u00e1n v\u00e9gzett 2019-ben, majd egy r\u00f6vid telev\u00edzi\u00f3s kit\u00e9r\u0151 ut\u00e1n n\u00e9gy \u00e9vig a Forbes Magyarorsz\u00e1g \u00fajs\u00e1g\u00edr\u00f3ja volt. K\u00e9t \u00e9vig szerkesztette a legbefoly\u00e1sosabb magyar n\u0151k list\u00e1j\u00e1t, h\u00e1rom \u00e9vig dolgozott az 50 leggazdagabb magyar list\u00e1j\u00e1n, \u00e9s kiemelt t\u00e9m\u00e1ja volt m\u00e9g a kock\u00e1zati t\u0151ke \u00e9s a magyar startupvil\u00e1g. 2022-ben Junior Prima d\u00edjat kapott. 2023 okt\u00f3ber\u00e9ben csatlakozott a Direkt36-hoz.[:en]\u00c1gnes graduated in television production from the University of Theatre and Film Arts in 2019 and after a short detour in television she worked as a journalist for Forbes Hungary for four years. There she was the editor of the most influential Hungarian women list for two years, and worked for three years on the list of the 50 wealthiest Hungarians. She also covered venture capital and the Hungarian startup ecosystem. She was awarded the Junior Prima Prize in 2022 and joined Direkt36 in October 2023.[:]"},{"term_id":522,"user_id":0,"is_guest":1,"slug":"andraspetho","display_name":"Andr\u00e1s Peth\u0151","avatar_url":{"url":"https:\/\/www.direkt36.hu\/wp-content\/uploads\/2023\/10\/Petho-Andras.png","url2x":"https:\/\/www.direkt36.hu\/wp-content\/uploads\/2023\/10\/Petho-Andras.png"},"author_category":"1","user_url":"","last_name":"Peth\u0151","first_name":"Andr\u00e1s","job_title":"","description":"[:hu]Andr\u00e1s a Direkt36 egyik alap\u00edt\u00f3ja, szerkeszt\u0151je \u00e9s \u00fcgyvezet\u0151 igazgat\u00f3ja. Kor\u00e1bban az Origo vezet\u0151 szerkeszt\u0151je volt, miel\u0151tt a port\u00e1l r\u00e9sze lett a korm\u00e1ny propagandag\u00e9pezet\u00e9nek. Andr\u00e1s dolgozott a BBC World Service-n\u00e9l Londonban \u00e9s a Washington Post t\u00e9nyfelt\u00e1r\u00f3 rovat\u00e1n\u00e1l is. R\u00e9szt vett sz\u00e1mos nagy nemzetk\u00f6zi nyomoz\u00f3 projektben, k\u00f6zt\u00fck a Panama-iratok feldolgoz\u00e1s\u00e1ban. K\u00e9tszer is elnyerte a legjobbnak \u00edt\u00e9lt t\u00e9nyfelt\u00e1r\u00f3 cikkek szerz\u0151inek j\u00e1r\u00f3 Soma-d\u00edjat. T\u00f6bbsz\u00f6r tanult \u00f6szt\u00f6nd\u00edjjal az Egyes\u00fclt \u00c1llamokban: 2008-ban a World Press Institute programj\u00e1ban, 2012-13-ban Humphrey-\u00f6szt\u00f6nd\u00edjask\u00e9nt a Marylandi Egyetemen, 2019-20-ban pedig Nieman-\u00f6szt\u00f6nd\u00edjask\u00e9nt a Harvard Egyetemen. Andr\u00e1s t\u00f6bb magyar egyetemen is tan\u00edtott \u00fajs\u00e1g\u00edr\u00f3 kurzusokat.[:en]Andr\u00e1s is co-founder, editor and executive director of Direkt36. Previously, he was a senior editor for leading Hungarian news site Origo before it had been transformed into the government\u2019s propaganda outlet. He also worked for the BBC World Service in London and was a reporter at the investigative unit of The Washington Post. He has contributed to several international reporting projects, including The Panama Papers and the Pegasus Project. He plays a leading role in the production of Direkt36\u2019s documentaries, including The Dynasty, the award-winning film on the business empire of Viktor Orb\u00e1n\u2019s family. He won the Soma Prize, the prestigious annual award dedicated to investigative journalism in Hungary, three times. He was a World Press Institute fellow in 2008, a Humphrey fellow at the University of Maryland in 2012\/13, and a Nieman fellow at Harvard University in 2019\/20. 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