Zsolt Hernádi

Mysterious trips of Viktor Orbán and János Lázár to Switzerland

Today I will have to pull up my socks if I want to give even a semi-coherent summary of the growing scandal surrounding a company called MET Holding A.G. with headquarters in Switzerland. The holding company, established only a couple of years ago, is partially owned by MOL (40%) and partially by Hungarian individuals–people formerly employed by MOL and businessmen with close ties to Viktor Orbán.

First of all, it’s hard to decipher the company’s structure which is, as is often the case with enterprises like MET Holding, extremely complicated. Second, since it is likely that MET Holding, in addition to its regular activities, also serves as a money laundering operation for Fidesz as well as Viktor Orbán and his friends, those involved do everything in their power to conceal the company’s business activities, ownership, financials, and so on.

I should go back a few years to February 2010, only a month before the national election and the birth of the two-thirds majority, when the U.S. Embassy in Budapest compiled a report entitled “Allegations of political corruption surround unbundling law.” From the lengthy report we learn that “it is an open secret in Hungary that MVM and MOL provide significant funding to the two main political parties, with MVM rumored to favor the Socialists and MOL favoring Fidesz.”

MET Group predated this U.S. report. According to its promotional material, it began operating in 2007 “in the natural gas retail and wholesale sector benefiting from the market liberalization starting in 2004.” Currently it is active in wholesale gas trading in the European market as well as in the retail sale of natural gas to industrial customers in Hungary, Slovakia, Romania, and Croatia. Five years later, in 2012 MET Holding was established with the objective of being “a central holding organization to manage and support all the subsidiaries of MET Group.” (If you want to know why MET Holding might have been layered on top of MET Group, I suggest you take a look at “How a Holding Company Works.”)

Shortly after the election in 2010 Orbán promised cheaper energy to consumers. In order to lower prices the state-owned MVM (Magyar Villamossági Művek) was allowed to dip into its gas reserves which it could then replenish with cheaper gas from the open market. MVM could have bought the necessary gas directly from Austria, but instead it purchased gas through MET. According to the figures that are available about the transaction, MVM gained little while MET made about 50 billion forints on the deal.

The owners of MET, in addition to MOL, are István Garancsi, a personal friend of Viktor Orbán and owner of Orbán’s favorite football team, Videoton, and György Nagy, one of the founders of Wallis Asset Management Co., a private equity/venture capital firm. Both men have close ties to Zsolt Hernádi, the beleagured CEO of MOL who is accused of bribery in Croatia, and to Sándor Csányi, his deputy and the CEO of OTP, Hungary’s largest bank. Heading MET Holding is Benjamin Lakatos. He expects sales this year to total some 3.8 billion euros.

Most likely nobody would have cared about this Hungarian company with headquarters in Zug, Switzerland, if Hungary’s prime minister hadn’t been so involved in negotiations with Putin as well as with Russian energy companies, in particular Gazprom and Rossatom, the Russian company that specializes in building nuclear power plants. Rossatom was chosen to construct two extra reactors at the Paks power plant. Given the widespread concern over Viktor Orbán’s dealings with the Russian autocrat, Swiss journalists started probing into this mysterious MET. A  well researched article appeared on November 3 in TagesAnzeiger, which was later reprinted in Basler Zeitung. According to the Swiss paper, MET Power, MET Marketing, MET International, and MET Holding all share the same Zug address. Benjamin Lakatos is the CEO of all of them. Zug, by the way, is about 20 km south of Zurich.

I understand that the company’s management is made up of former MOL employees who know the energy business inside out but who found greater opportunities outside of MOL. Lakatos is very proud of his achievement of building MET Holding in two years from practically nothing to a sizable player in the energy business, though one cannot help but be suspicious of a such a sudden rise in fortune. Moreover, given the cozy relationship in the past between MOL and Fidesz, one wonders what role MET may play in the possibly continued reliance of Fidesz and Viktor Orbán on MOL as a source of illicit money. With István Garancsi’s name in the cast of characters, one becomes doubly suspicious since he is often portrayed in the Hungarian press as Orbán’s front man.

And now let’s move to more recent events that might have something to do with MET Holding. I’m patching the story together from several sources. You may recall that the editor-in-chief of Origo, an online news portal, was dismissed because one of the reporters of the internet site was too curious about a couple of very expensive trips János Lázár, the most important member of the Orbán government after the prime minister, made to Great Britain and Switzerland. Lázár for a long time resisted revealing any details of these trips but eventually after a court order the prime minister’s office released some information. Among the bits and pieces of information that Origo received, there was one item that might be relevant. Origo was informed that János Lázár during his Swiss trip “held conversations with a German citizen about German-Hungarian and Russian-Hungarian relations.”

More than a year later there was another trip to Switzerland. This time it was a private affair. Viktor Orbán and his wife and János Lázár and his wife spent a weekend in Zurich. First they stopped in Germany to visit a “family friend” and then off they went to Zurich, allegedly to attend a concert given by a children’s choir from the Szekler areas of Romania. Quite a lame excuse for traveling to Zurich because earlier this same group gave three concerts in the Hungarian Parliament in Budapest. There was also a side trip to visit a friend in Germany. Is he perhaps the same man Lázár held talks with in March 2012?

About a week ago Viktor Orbán made another trip to Switzerland. This time the occasion was a family visit (including his wife and their two youngest daughters) with Rachel, who is enrolled in a fancy, expensive hotel management course in Lausanne. Since, again, this was a private visit, the prime minister’s office refused to release any information about the trip. However, thanks to an eagle-eyed person, Orbán was spotted at the  Zurich railroad station having a beer with an unidentified man. Since the Orbáns decided to travel back to Hungary by train, a stopover in Zurich was unavoidable since there is no direct train from Geneva, a forty-minute train ride from Lausanne. But why did he choose to go by train from Lausanne all the way to Budapest, a trip that takes altogether 16 hours and 22 minutes? He said that wanted to spend more time with his children. Well, I could imagine many more pleasant ways of spending time with my family than sitting in a second-class train compartment. Suspicious Hungarians already have their own theory: for one reason or other, Orbán chose to travel by train because there is no inspection of either persons or luggage on trains. I find that difficult to believe. I hope that we are not at a point that the country’s prime minister is carrying millions of euros in his suitcase.

Although one can probably discard such speculation, one should take more seriously the information received by the Demokratikus Koalíció that while in Zurich Orbán met representatives of Credit Suisse and Pictet Bank. Pictet is a private bank which in 2012 was the target of a U.S. probe into the use of foreign banks by wealthy Americans seeking to avoid paying taxes. Pictet specializes in “wealth management.” As for Credit Suisse, which is one of the most powerful banks in the world, it also had its problems with the law. In July 2014 Credit Suisse reported a loss of $779 million because of the settlement of a tax evasion case in the United States. Zsolt Gréczy, the spokesman for DK, emphasized that they are not accusing Orbán of anything; they simply want to know whether he met with representatives of these two banks as the prime minister of Hungary or as a private individual.

All in all, the picture that emerges from the few pieces of information we have is not pretty. Orbán has enough trouble as it is. Tonight another 10,000 people demanded Ildikó Vida’s resignation–and his as well.

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International pressure on Viktor Orbán: Russia, Putin, and Gazprom

There is real concern among former Hungarian diplomats and foreign policy experts that Hungary’s isolation is practically complete and that she may remain the only “strategic ally,” to use Viktor Orbán’s favorite term even in connection with China, of Vladimir Putin’s Russia. And if the Orbán government does not try to extricate itself from this situation, the consequences can be serious. Although Fidesz supporters are convinced that the United States has embarked on the destabilization of the country with the goal of removing Viktor Orbán from power, this cannot be Washington’s intent. After all, the opposition is in disarray and replacing Orbán with another Fidesz politician would not accomplish anything. A new prime minister would be merely a figurehead; the real power would remain in the hands of Viktor Orbán.

Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States and the massive demonstrations against the internet tax that soon enough became a protest movement against the whole regime. But the latter wasn’t the U.S.’s doing. It was the folly of the Hungarian government that seems to commit more and more mistakes lately. Did Viktor Orbán lose his magic touch, or has he navigated himself into an impossible situation in which the “peacock dance” is no longer possible? He is increasingly being faced with a stark choice: either total commitment to the side of Russia or capitulation and acceptance of the rules of the game within NATO and the European Union.

Orbán might be a good politician–if we define a good politician as someone who can play one person against another, who can fool his allies, who disregards the law, and who within a few years manages to institute a one-party system, because that is what we have in Hungary. But his track record shows that he cannot govern, that he cannot run a country successfully. We who watched his first four years between 1998 and 2002 with growing concern knew that already, but it seems that in the eight years that followed his disastrous rule the Hungarian people forgot why they went out in record numbers to make sure that this man and his regime don’t come back.

The situation today is ten times worse than it was during his first administration. He has transformed the country into an illiberal democracy, and his pro-Russian policies have alienated Hungary’s allies. Viktor Orbán is considered to be a pariah and someone who is toxic because of his potential influence on some of the other countries in the region. Western politicians look upon him as a fellow traveler of Vladimir Putin. And, indeed, they seem to borrow each other’s ideas. Orbán copies Putin’s attacks on NGOs, while, it seems, Putin was inspired by Orbán’s nationalization of the textbook industry, reported just yesterday in the western press.

During his first administration Orbán was fiercely anti-Russian, and it seems that he didn’t change his mind on that score until lately. In December 2009 a Hungarian foreign policy expert and obvious admirer of Orbán described the forthcoming Fidesz victory as “Moscow’s nightmare.” Early in his second administration he worked furiously on a quasi-alliance system from the Baltic to the Adriatic in which Hungary would have a leading position. But his fellow prime ministers in the region wanted nothing to do with Orbán’s grandiose plan. He made every effort to dislodge Surgut, a Russian company that had a 21.2% stake in MOL, the Hungarian oil and gas company. By May 2011, after lengthy negotiations, the Hungarian government bought out Surgut, paying a very high price. At that time Hungary was no friend of Russia. Not yet. However, according to Fidesz sources, Orbán decided to radically change course sometime in early 2013.  He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant. According to the same sources, his decision was based on his belief that the Czech Republic and Germany would need cheap energy which Hungary would be able to provide.

Since then, with the outbreak of the Russian-Ukrainian conflict, the political climate in Europe has changed dramatically. Orbán’s flirtation with Russia is looked upon with more than suspicion. The West considers Viktor Orbán and Hungary a liability. Soon enough, I believe, he will have to show his true colors. No more peacock dance. But it seems that Orbán by now is embroiled in all sorts of machinations with Russia in general and Gazprom in particular. The current setting for Hungarian machinations with Gazprom is Croatia.

Just a few words by way of background. In 2008-2009 MOL acquired a 47.47% stake in INA, the Croatian oil and gas company. In 2011 a Croatian newspaper reported that Zsolt Hernádi, CEO of MOL, had been accused by the Croatian prosecutor’s office of bribery. Naturally, the Hungarian prosecutor’s office found nothing wrong, but the Croats eventually went so far as to hand the case over to Interpol. As a result, Hernádi couldn’t leave the country; otherwise he would have been subject to immediate arrest. More details can be found in a post I wrote on the subject in October 2013. The decision was eventually made to get rid of MOL’s share in INA, but the Croatian government does not have the kind of money needed to buy MOL’s stake. Lately, there has been talk in the Hungarian press that MOL will sell its shares to a Russian buyer, most likely Gazprom itself. So, Gazprom will not only store gas in Hungary but might even control almost half of INA in Croatia.

INA: Managed by MOL

INA: Managed by MOL

And now let’s return to American-Hungarian relations. According to some observers, “the highly unusual step of blacklisting six people with ties to the government in Hungary, a NATO ally and European Union member,” also has something to do with the “growing closeness between Hungary and the Kremlin over energy that could undermine Western attempts to isolate Russian leader Vladimir Putin over his intervention in Ukraine.” So far there is not much new in that assertion, published in an article by Reuters. We have known all along that, in addition to Orbán’s domestic policies, his relations with Russia were a serious concern to the United States and the European Union. What is new in this revelation is that Washington is apparently keeping an eye on the possible MOL-INA deal with Gazprom. According to the article, Chris Murphy, U.S. senator from Connecticut, was dispatched to Zagreb “to lobby the government … on the issue.” Another interesting piece of information gleaned from the article is that State Department official Amos J. Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs, met Hungarian Foreign Minister Péter Szijjártó and had a “productive meeting during Szijjártó’s recent visit to Washington about MOL’s stake, the South Stream, and Hungarian gas deliveries to Ukraine.”

All in all, it seems to me that Viktor Orbán is in over his head, especially with a foreign minister with no diplomatic experience. Szijjártó was an excellent spokesman for Viktor Orbán as the head of the “parrot commando,” but he is not qualified to be foreign minister, especially at such a delicate juncture.

It is hard to tell what Orbán’s next step will be. Fidesz media attacks on the United States are fiercer than ever, and its admiration of Russia is frightening. But more about that tomorrow.

Hungarian thread in the Polish scandal

This time we will make a trip to Poland, a country that in the last two weeks has been in political turmoil. It all began with some tapes released by Wprost, a news magazine, on which Marek Belka, governor of the Polish national bank, and Bartłomiej Sienkiewicz, minister of the interior, have a conversation in June 2013. During the conversation, one can hear Sienkiewicz asking Belka whether the central bank would help the government by cutting interest rates if Poland faced an economic meltdown before the elections this year. It appears that Belka says that “his condition would be the removal of the finance minister, Jacek Rostowki.” Rostowski was indeed removed in November 2013, but the national bank did not lower interest rates. Jaroslaw Kaczyński, the leader of the opposition Law and Justice party, said he would call for a no-confidence vote.

But what does all this have to do with Hungary? Well, as it turned out, Wprost had other tapes in its possession in which Polish politicians can be heard talking about international affairs. They certainly don’t mince words when talking about the United States, David Cameron, or, as it turned out, Viktor Orbán. The discussion is studded with such expletives and sexually explicit language that when I wanted to read the details of these conversations in IndexI was confronted with a page on which I had to attest that I was over eighteen. That will give you an idea.

But let’s first introduce you to the cast of characters. First and foremost, there is Radosław Sikorski, Poland’s foreign minister, who just threw his hat in the ring to replace Lady Catherine Ashton as high representative of the Union for foreign affairs and security policy and vice-president of the European Commission. On the released tape Sikorski has a conversation with Jacek Rostowski, the man who lost his job as finance minister last November. I have the feeling that after these revelations, Sikorski can forget about any position in Brussels. I even doubt that he will remain foreign minister of Poland for long.

Perhaps the  most damaging part of Sikorski’s remarks is what he had to say about U.S.-Polish relations, especially after Barack Obama’s visit to Poland and his promise of a billion dollars to beef up defenses in central and eastern Europe. Sikorski asserted that “the Polish-American alliance is worthless, even harmful, as it gives Poland a false sense of security. It’s bullsh..t.” Sikorski on the same tape allegedly said that the Polish people have the mentality of “murzyńkosć,” a derogatory and racially-loaded term meaning roughly “like a Negro.” “The problem in Poland is that we have very shallow pride and low self-esteem,” he added.

It turned out today when the whole tape was released by Wprost that Sikorski also has a very low opinion of David Cameron. The embarrassing details were  immediately reported by the British media. To get the full flavor of the conversation one should read an article published a few hours ago by The Guardian.

These are  juicy stories that are spreading rapidly in the international press. But other tapes were also released, one of which is about Hungary. Russian-Hungarian relations and the legal difficulties of Zsolt Hernádi, CEO of MOL, the Hungarian oil and gas company, were discussed by Dariusz Jacek Krawieć, CEO of PKN Orlen S.A., the Polish refinery, and Włodzimierz Karpiński, current minister of finance. It is that conversation that Index refuses to allow people under the age of eighteen to read. The upshot of it is that Orbán made a very bad deal and that Hungary by this loan agreement became a “vassal” of Russia.

And now on to Zsolt Hernádi, who is being accused in Croatia of paying €5 million to Ivo Sanader in exchange for a 48% stake in INA, the Croatian refinery company owned by the Croatian state. Soon enough formal charges were leveled against Hernádi and an international warrant was issued for his arrest. Hernádi was stuck in Hungary. Otherwise Interpol would have arrested him. It also seems that a former employee and a small investor in MOL sued Hernádi for damages she allegedly suffered as a result of the bribery charges leveled against Hernádi. In the first round, not terribly surprisingly, the court decided in his favor.

Zsolt Hernádi, a close ally and friend of Viktor Orbán / Source; maszol.ro

Zsolt Hernádi, a close ally and friend of Viktor Orbán / Source; maszol.ro

Jacek Krawiec adds spice to this story. Let me quote:

Listen, I’ll tell you a case which shows how different our situation is from that of the Hungarians. I visited Hernádi because he cannot leave Budapest. I asked him: “How many years will you get?” He was cool as a cucumber and smiled broadly. “Listen”–he said–“my lawyers found something. If in any one of the EU countries I am acquitted of these charges then all EU states must accept the verdict and so I can travel again in Europe.” I asked him: “Will this trial take place in Hungary?” He said, “Yes.” So, I told him that this might mean two or three years. His answer was: “There will be a verdict by April.”  Next to him sat a character, a legal director, a puffed-up character, Ábel somebody or other [actually Ábel Galácz, director in charge of sales]. Hernádi turned to him and said, “Ábel, tell Jacek who will bring the suit.” Ábel told me that it is his own wife! Do you understand? Imagine such a situation. The wife is the plaintiff, comes the acquittal, and all is taken care of. Can you imagine something like that happening in Poland?” To which Karpinski added: “This is what Kaczyński is dreaming of in Poland.”

The dates seem to support his story. In the middle of December Krawieć with a large delegation did come to Budapest to conduct business negotiations with MOL. It was on December 6 that MOL announced that a former MOL employee and small investor had sued Hernádi for bribery, corruption and damages resulting therefrom. By January 11, Népszabadság reported that something was fishy about this suit and learned from international legal experts that if Hernádi wins, Croatia must drop the charges and withdraw the warrant issued by Interpol against Hernádi.

So, the suit was a clever charade as even the right-wing press suspected. A reporter for Heti Válasz told Hernádi point blank that “allegedly you move Ilona Bánhegyi [the plaintiff] in order to get an acquittal and the appeal is just part of the ‘game.'” To which Hernádi answered, “I don’t wish on anyone that half an hour I spent waiting for the verdict. Who would place one’s fate in the hands of a judge in such an uncertain and politically charged case? I am only the incidental victim of this story.” Ilona Bánhegyi is appealing the case. I wonder what the judge of the appellate court will say once he reads this story in the newspapers.

MOL’s CEO, the Croatian courts, and Viktor Orbán

It’s time to turn our attention to the woes of MOL, the Hungarian oil refining company, in Croatia where the company owns 49.1% of INA (Industrija Nafte), its Croatian equivalent, and has management rights. MOL acquired this holding in 2009.  A couple of years later, in the summer of 2011, the leading Croatian paper, Večernji list, reported that MOL’s CEO, Zsolt Hernádi, was accused by the Croatian prosecutor’s office of bribery in connection with the privatization of INA. According to the paper, Hernádi paid Ivo Sanader, Croatian prime minister at the time, €5 million for a favorable deal. As a result, MOL received a 47.47% stake in INA while the Croatian government held on to 44.85%. Sanader abruptly resigned on July 1, 2009 and fled to Austria from which he was eventually extradited. Following a long legal procedure he was sentenced to a ten-year jail term, which he is currently appealing.

Several times Croatian prosecutors tried to question Zsolt Hernádi, to no avail. Eventually the Hungarian prosecutors decided to investigate on their own but found no grounds for the charges. It is a long story, which I tried to summarize back in November 2012.

A few days ago the case took a much more serious turn. HVG reported already in July that the Croatian authorities planned to issue an international arrest warrant that would force the Hungarians to hand over Hernádi to the Croatian prosecutors. It took a little while, but on September 27 Hungarian papers reported that Hernádi’s picture is the first among several Hungarian nationals who are being sought by Interpol. Hernádi was supposed to appear at a Zagreb court on September 25 and, when he didn’t show, the judge ordered his arrest. Hungarian legal experts on international law, by the way, cannot decide whether or not Hungary is obliged to hand Hernádi over to the Croats.

It was at this point that Viktor Orbán decided to interfere. With that interference the longstanding feud between MOL and its business partner, the Croatian government, moved to a political level. The Hungarian government pointed out that “the developments of the past few days … made it clear to the [Hungarian] government that the dispute is no longer an economic conflict between co-owners and shareholders.” It noted that there is a concerted Croatian effort “to exert pressure [on MOL] outside the economic sphere.” The communiqué added that “these methods are unacceptable in the European Union and therefore Hungary cannot leave these measures unanswered.” For good measure the government cancelled Hungarian participation in a summit organized for October 3 in Dubrovik and asked MOL’s management to review the company’s portfolio and if necessary prepare the sale of its INA shares to the Croatian government or a third party. The cabinet also authorized “the Minister of Justice and the management of the Hungarian Asset Management company [that handles state assets] to examine what civil and criminal action would be possible to resolve the damages to MOL and Hungary.” Viktor Orbán showed that he is a tough guy who doesn’t allow anyone to treat an important Hungarian company this way.

The answer of Croatia’s prime minister, Zoran Milanovic, was conciliatory, but he pointed out that “Croatia’s government has no influence over the decisions taken by the country’s judicial bodies.” The Croatian president, Ivo Josipovic, was less charitable, saying that Orbán doesn’t seem to realize that Croatia is not Hungary where the government can instruct the judiciary.

Orbán is not changing his stance on the issue. Today during his usual Friday morning interview he reiterated that “coercion outside the economic realm does not make it possible and justified [for MOL] … to remain in the Croatian energy market.” He gave advice to the Croats: the state should get their energy sector back. Buy the MOL shares just as Hungary bought the gas storage facilities from E.On. That’s the civilized way, he added.

MOL3

As far as the Croatian government is concerned, the solution is not that simple. According to Croatian papers, the government doesn’t have the €7.8 billion necessary to buy MOL’s stake at market value. But who else would be foolish enough to buy into INA given the murky purchase of the MOL stake? If it turns out that Hernádi is implicated, the entire original agreement of 2009 might be deemed null and void and the ownership of the MOL shares might be transferred to the Croatian government.

I’m also not at all sure whether MOL would consider selling its rather large holding in INA at this juncture. Apparently in the last three years the company invested a great deal of money into INA, and it is unlikely under the circumstances that MOL would receive a fair price for its stake. INA is a large chunk of MOL’s total wealth: about a third of all its assets. MOL’s importance as the region’s largest oil refinery would be jeopardized, especially if we consider Croatia’s access to harbors and pipelines necessary for MOL’s future expansion.

Orbán’s interference might also impact the price MOL can get for INA as a “state-ordered decision doesn’t bode well, even if selling the stake would be the economically reasonable step for MOL.” Meanwhile, MOL stock has dropped 4.6% in the past three days and is heading for its lowest close in sixteen months.

Sooner or later one will have to ask what actually happened in 2009 when MOL acquired its INA holding and its management. Until now no one in Hungary questioned Hernádi’s innocence, but lately there are more and more voices raising the issue of possible wrongdoing. As the argument goes, if Hernádi is innocent why isn’t he ready to face his accusers? Why does Viktor Orbán insist on MOL’s divesting its Croatian business? Is it perhaps because this way the Hungarian government hopes that the case against Hernádi will be dropped and therefore Hungary will not be obliged to extradite him to the Croatian authorities? There are just too many questions and at the moment no answers.

Sándor Csányi’s press conference

As Portfolio, the bilingual financial site, said today, “everybody was sitting on pins and needles” waiting for the cabinet decision on the fate of the loans issued in foreign currencies. However, it seems that the government wisely postponed the decision. So, for a while we will not know what kind of a solution the government will come up with.

An announcement of the decision at this point could have had an adverse effect on the financial and economic health of the country. Coming so soon after Sándor Csányi, the CEO of OTP, and some of the bank’s top officials sold millions of OTP shares, such an announcement might have further roiled the financial markets and would probably have had a negative effect on the value of the forint. As it was, the forint weakened, although not significantly, after the National Bank’s expected announcement that it would once again lower the interest rate, now down to 4%.

But there was another much awaited event, Sándor Csányi’s press conference after his return from an African safari. He managed to calm investors’ nerves; OTP closed up 4.7% today.

The press conference itself was quite unusual in that it was by invitation only. Let me first list the media outlets whose reporters were not invited: Kossuth Rádió, Magyar Televízió, Hír TV, Magyar Nemzet, HVG, and Index. Csányi invited TV2, ATV, Népszabadság, Origo, RTL Klub, and the Hungarian news agency MTI. As for the foreign press, reporters from Dow Jones, Bloomberg, and Reuters were present. In brief, the pro-government news outlets were pretty well ignored.

Sándor Csányi the gracious host

Sándor Csányi, the gracious host

First of all, Csányi made it patently clear that he has no intention of leaving his post as CEO of OTP. He made some references to Magyar Nemzet‘s false rumors about his health which he claimed is excellent. After all, he just walked 15 km in 40ºC in Africa. As to why he sold such a large number of OTP shares, Csányi partially stuck to his earlier explanation of his plans to open a large slaughter house in Mohács for which he needed capital. However, he admitted that since the value of OTP stock had been so volatile of late, he left word to sell if the shares fell to a certain price.

Csányi denied any intention “to send a message” to the prime minister via his stock sale. “I know Viktor Orbán. He doesn’t get scared easily.” Selling his stock would have no more effect on Orbán than attacking him with paper planes. He refused to see the government’s action as an attack on him personally or on his bank because, after all, OTP wasn’t handled any differently from the banking sector as a whole. On the other hand, he did make some malicious remarks about János Lázár, who recently attacked Csányi and his “empire,” comparing OTP to an octopus. He described it as a powerful organization with far-reaching tentacles that caused harm to the country as a whole. While claiming that these personal attacks don’t bother him, Csányi couldn’t help making a dig of his own. He told the reporters that he doesn’t know Lázár well, but people have told him that Lázár is a clever politician and a good organizer. He added, “We see how well he handled the tobacconist affair.”

But Lázár wasn’t the only target of his caustic remarks. Csányi expressed surprise at Magyar Nemzet’s decision to come out with the story of his heart operation only now when the owners of the paper, including Lajos Simicska, already knew all about his operation in February. Reporters naturally asked his opinion of the Orbán government’s decision to nationalize the 104 credit unions and inquired whether that would in any way adversely affect the interests of the banking sector. According to Csányi, the nationalization of the credit unions might actually benefit the banks. It is very possible that those who used to bank with the credit unions will move over to the commercial banks.

Otherwise he praised Zsolt Hernádi, CEO of MOL. Hernádi certainly needs every bit of help he can get at the moment because the old bribery charge against him has been revived. Croatian prosecutors accuse him of bribing Ivo Sanader, the former prime minister of Croatia, in order to obtain a majority share in INI, the Croatian oil company. Sanader is currently serving a ten-year sentence in Croatia. These accusations surfaced already in 2011 but the Hungarian prosecutor’s office refused to allow the Croats to question Hernádi. But Croatia’s efforts have intensified and now that it is part of the European Union it has a better chance of obtaining a European arrest warrant against Hernádi.

As for what will happen with the forex mortgages, the fear is that the government is thinking in terms of a “comprehensive” solution to the problem. That is, not only will those who are unable to pay their mortgages be offered some relief but everybody who ever took out a forex loan. That may mean, according to the calculation of  Index, 675,000 individuals. It’s no wonder that the government postponed the decision.