Hungarian government officials are devoted family men, and Hungarian National Bank governor György Matolcsy is no exception, according to 24.hu.
The latest scandal involving the controversial figure clearly illustrates how various family clans within the Fidesz political family have enriched themselves and family members at the expense of Hungarian and European taxpayers in a manner that does not appear on the asset declarations of Hungarian public officials.
In an article published on Tuesday, the daily online 24.hu revealed that Matolcsy resides with his second wife in a luxurious home in Budapest’s exclusive Second District. The property was acquired by his son’s company with the proceeds of a loan from a bank owned by Matolcsy’s cousin.
The three-storey, 470-square-meter “Provence-style” villa sits on a 1,300-square-meter plot on the edge of Budapest’s upscale “Rose Hill” (Rozsadomb) neighborhood.
According to 24.hu, the property was acquired last year by Magyar Stratégia Zrt., a company whose main activity is the purchase, sale, and lease of property. 24.hu reports that a HUF 280 million lien was registered on the property by the NHB Novekedesi Hitel Bank (NHB Growth Credit Bank), a bank in which Matolcsy’s cousin, Tamas Szemerey, acquired a 20 percent interest last year.
Among Magyar Stratégia Zrt.’s holdings is New Wave Media, the owner of origo.hu, one of Hungary’s most important daily onlines, purchased from Magyar Telekom in 2015.
When asked whether the central bank governor was using the real estate owned by his son’s company, the National Bank of Hungary (MNB) responded that “information pertaining to the MNB chairman’s use of real estate and residency is not public information,” adding that no contractual relationship existed between MNB and Adam Matolcsy’s company.
Adam Matolcsy told the online daily that, in addition to company employees, only he and his father used the property in a manner appropriate to the company’s activities.
24.hu writes the following:
There is nothing which forbids somebody, even a government official, from using a property owned by a relative, or living there. However, in Matolcsy’s case there are several reasons why this should be considered public information, apart from the fact that this is not the first time the central bank governor has been involved in real estate matters difficult to explain: in August 2016, shortly before its closure, daily Nepszabadsag revealed that Matolcsy was using the luxury flat in the Buda Castle district owned by the head of a commercial bank.
First of all, by using the above construction the MNB chairman could avoid disclosing that he was using a HUF 400 million (USD 1.7 million) dream residence together with his son. According to the former’s asset declaration, which reflects the situation at the end of 2017, Matolcsy’s only real estate is a 150-square-meter house in Balatonakarattya (the Lake Balaton town of which Matolcsy’s ex-wife serves as mayor). His asset declaration also maintains that he lives together with his wife, Zita Matolcsy, without children. From this two things can be concluded.
The owner of the company which owns the villa, Adam Matolcsy, does not live there. In this way the central bank governor could conceal that the purchase of the real estate advertised for nearly HUF 400 million was partly used, in part, as his place of residence. By the way, according to Matolcsy’s asset declaration, he has no savings, no debts, and his only source of income is the gross monthly salary of HUF 5 million (net HUF 3.4 million), plus the occasional bonus.
There is a contradiction between the MNB chairman’s asset declaration and what we observed, as well as what Matolcsy’s son claimed. According to the 2017 year-end asset declaration, Matolcsy lives with his wife. Not only is this realistic, it is confirmed by what we observed at their place of residence. However, it follows from Adam Matolcsy’s claim that Zita Matolcsy is not using the company property.
Furniture factory, Origo
The official owner of the real estate, the 2011-founded Magyar Strategia Zrt., only recently started its conquests.
The company owns another enterprise, Glamorous Kft., a manufacturer of beauty industry equipment, previously owned by Ádám Matolcsy and another private individual.
In 2015, through this company, Ádám Matolcsy purchased the high-end furniture factory Balaton Butor Kft., with the help of a HUF 400 million loan from the NHB bank. Last year, Balaton Butor won three public tenders involving EU funds totaling almost HUF 600 million (USD 2.2 million). It also won another HUF 350 million (USD 1.4 million) public tender together with another company.
Origo.hu publisher New Wave Media Kft. was also purchased by Magyar Stratégia Zrt.
For a few years after its founding, the company was practically in a state of dormancy. Then in 2015 it realized profits of HUF 40 million after revenues of HUF 50 million. 2016 was an even better year, realizing a profit of HUF 120 million after turnover of HUF 145 million. From these results, dividends of HUF 10 million and HUF 75 million, respectively, were paid to Ádám Matolcsy.
The Matolcsy family and the central bank governor’s cousin, Tamás Szemerey, have worked closely together over the past few years.
- When Ádám Matolcsy started building a summer home/agricultural building with a panoramic view two years ago in Balatonfured, the contractor was Raw Development Kft., a company tied to Tamás Szemerey.
- The same company received a large number of orders from the central bank.
- Then the company renovated for HUF 50 million the roughly HUF 200 million Budapest loft flat that Tamás Szemerey bought through another company, but whose use he gave to Ádám Matolcsy.
- At the center of NHB Bank owner Tamas Szemerey’s empire is Bankonzult Gazdasagi es Penzugyi Tanacsado Kft. (Bank Consult Economy and Financial Advisor Kft.). The company was paid HUF 60 million by the six central bank foundations and even the central bank for the company’s economic analysis.
- Less than a year ago, Bankonzult obtained a 20 percent ownership of MKB Bank run by Matolcsy’s former right-hand Ádám Balog. The central bank ran the bank until its privatization.
- The central bank foundations may have kept many tens of billions of forints worth of assets at the National Bank at the beginning of 2015, for which they received commissions after the money parked there.
- The bank assisting in the purchase of the aforementioned luxurious real estate, NHB Bank, participated in the central bank’s zero interest expansion credit program. It remitted a large part of the free loan, along with a 2.5 percent mark-up – the maximum permitted – to companies mainly owned by Szemerey, relatives, and companies owned by friends, in addition to Ádám Matolcsy’s Balaton Butor.
- Tamás Szemerey’s wife, Gabriella Szemerey, is the director of one of the central bank foundations (whose board of trustees is chaired by György Matolcsy himself). She is also a member of the body at Pécs University’s doctoral program responsible for giving out scholarships. A large number of central bank employees and people tied to the MNB foundations are enrolled in the doctoral school.