Hungary’s political establishment reeling from Quaestor collapse

March 19, 2015

bokros3-700x400

We’re asking the government to make an official and obvious statement on this issue. We’re asking the government to block company assets, along with the assets of the owners and their family members. We’re asking the government to make a thorough and impartial examination on what kind of transactions Quaestor made in the period between the two companies’ bankruptcy. We’re asking the government to do their best to freeze the offshore bank accounts of the company and its owners. It’s the task of the government, the police and the MNB to find out who’s responsible for this happening, who issued and authorized fictional bonds! We’re asking for our investments to be reimbursed, along with interest, taxes paid on savings, and EHO (healthcare services)!”  – Quaestor victim Facebook page

You can’t play capitalism like ‘if we win, the profits will be private; if we lose, the losses will be communal’ – Lajos Bokros, commenting on demands that the government compensate the victims of collapsed financial broker Quaestor

In the wake of the collapse of Quaestor, 3000 customers have signed a petition calling for the personal assets of the company’s directors to be used to compensate the victims of the collapse of Hungary’s third financial brokerage in as many weeks.

At his Monday press event Fidesz caucus leader Antal Rogán called for personal assets of every person participating in the brokerage scandals of the recent past to be used to compensate the brokers` customers for losses numbering in the tens of millions.  He said his party would introduce legislation to parliament about this issue by the end of April, and announced that “the brokerage world requires a frequent and strict auditing system”.

At a press event held Monday morning in front of Quaestor’s Veszprém office, Hungarian Socilist Party (MSZP) deputy chairman Zoltán Gőgös advised aggrieved parties to file complaints with authorities “against unknown persons”. Calling it a “classic pyramid scheme”, Gőgös accused financial regulators of “aiding and abetting” Quaestor, stating that before the government change in 2010 “Quaester  was forbidden from engaging in these kind of activities.”

At a press conference held in Kaposvár on Tuesday, MSZP chairman  József Tóbiás expressed a similar opinion to Gőgös and called on Central Bank governor György Matolcsy to resign and for the National Bank of Hungary (MNB) to reimburse Quaestor’s customers for their losses.

Movement for a Modern Hungary (MOMA) chairman Lajos Bokros (pictured) told ATV that Antal Rogán has “jumped to the foregone conclusion” that the collapse of Quaester involved fraud.  Rogán is “banging on open doors” with his call for fraud perpetrators to be held personally liable, said Bokros, pointing out that “current Hungarian law does not permit authorities to strip them of all their assets, only those directly attributable to the fraud in question.”

Bokros said he did not understand how financial oversight investors could have concluded at the very outset of the reinvestigation that the company had been cheating for the past 15 years.  If so “why didn’t they try to prevent the series of frauds”, asked the former minister of finance.

As for Quaestor issuing fictive bonds, Bokros said “it is not realistic” because “brokerage companies and stock issuing companies must apply for and receive permission for every new product before accepting any money”.  The MOMA chairman believes there are two possible explanations.  Either the Financial Organizations State Supervisory Authority (PSZÁF) concluded a “real examination” but was “prevented from drawing a conclusion” and “initiating prosecution based on a suspicion of fraud”, or Hungarian financial regulators simply “did not fulfill their tasks”.

He said it seems as though the “government thinks the nation wants blood and is trying to satisfy this blood lust.” If it turned out that no fraud was involved and Quaestor’s collapse was simply a business bankruptcy, which is “programmed into the nature of capitalism”, then neither the company’s directors nor the government had any obligation to compensate the clients.  Bokros said the question is “how trustworthy the information was, and whether supervision examined” the correctness of the information. “You can’t play capitalism like `if we win it will be a private profit, if we lose it will be a communal loss’ […] because […] it reminds us of the Soviet world”.