Mészáros and Tiborcz become barons of Balaton as government pumps money into region

February 13, 2018

Mészáros and Tiborcz expand into Balaton as gov't pumps money into region
Lőrinc Mészáros (left) and István Tiborcz | Source: 444.hu

Two men with very close ties to the Prime Minister, Lőrinc Mészáros and István Tiborcz, have really established a presence around Lake Balaton, one of the region’s most popular tourist destinations. Hungarian weekly Magyar Narancs published a lengthy exposé on the subject in last week’s edition (pp 10-14).

Per Magyar Narancs, the expanding business empire of Mészáros (and to a lesser extent Tiborcz, the Prime Minister’s embattled son-in-law) coincides with a broader strategy by the government to fund tourism-related enterprises in the region, while at the same time relaxing building and environmental regulations to allow for more development. At the end of 2016, the government allocated some HUF 365 billion (USD 1.5 billion) for tourism-related investments around the lake. After 2019, a further HUF 300 billion (USD 1.2 billion) will be spent on such investments in the country, including around Lake Balaton.

Mészáros and Tiborcz expand into Balaton as gov't pumps money into region 1
Source: Magyar Narancs

In 2016, Mészáros acquired Hunguest Hotels, one of Hungary’s largest hotel chains, through Konzum, one of over 250 companies owned by the family of the former pipe fitter whose rags to riches ascendency since childhood friend Viktor Orbán returned to power in 2010 is the stuff of legends. Konzum acquired the hotel chain from Gellért Jászai, a businessman with close ties to Mészáros, only a few months after he had acquired the hotels from Tamás Leisztinger, a man associated with MSZP’s economic hinterland.  Hunguest Hotels owns and operates several hotels around the lake.

In 2017, Konzum acquired Balatontourist, three subsidiaries of which deal primarily with waterfront campsites.  Their holdings include 5,200 campsites, 500 bungalows, and 200 mobile homes spanning 106 hectares of mostly waterfront property. Mészáros’ company took control of Balatontourist before getting the proverbial green light from Hungary’s competition authority. For that indiscretion, they were fined HUF 5.3 million (USD 21,000).

“Fortunately, the government last year decided to give out grants totalling HUF 5 billion for campsite development-related projects],” Magyar Narancs writes. “But there is no need to worry, because Mészáros’ properties around Balaton go beyond Balatontourist and Hunguest.”

The Mészáros empire stretches well beyond campsites and hotels. Another Mészáros company, one that deals with the family’s agricultural holdings, Buzakalász 66 Kft., recently acquired 100 hectares of vineyards in the northern Balaton region. These properties were reportedly purchased from Sándor Demján, Hungary’s richest man (but seemingly not for long-ed.)

In late summer 2017, another Mészáros family company acquired the Balaton region’s commercial radio station, Part FM. The station covers the entire Balaton region, reaching as far as Székesfehérvár, Veszprém and Kaposvár. Mészáros’ media portfolio, which includes Mediaworks, former publisher of the now-defunct leftwing daily Népszabadság, also owns all four of the county newspapers servicing the Balaton region: Veszprém Megyei Napló, Zalai Hírlap, Somogyi Hírlap, and Fejér Megyei Hírlap.

“There are, of course, other sources of revenue. The south Balaton railroad renovation will reportedly cost HUF 72.4 billion (USD 290 million) (HUF 20 billion more than the initial estimate) and will be performed by Mészáros’ companies and Swietelsky,” Magyar Narancs writes.

Tiborcz has also been active around Lake Balaton in recent years. In late 2014, the prime minister’s son-in-law acquired the Keszthely marina from the local municipality in a very controversial transaction. When the acquisition became public, Tiborcz left the company (on paper at least). According to Magyar Narancs, the company continues to be owned by individuals with close ties to Fidesz politicians.

In Keszthely, the prime minister’s son-in-law, together with Mészáros, also reportedly acquired Hullám Szálló, a hotel built during the days of the monarchy and restored in 2004. This transaction was completed by purchasing a company, Pannon Tessera Hospitalis Zrt., led by Zoltán Somlyai, a business partner of Mészáros. The company is registered to a property owned by Tiborcz in Budapest and its legal counsel is Endre Hamar. (Hamar is reportedly named in the European Anti-Fraud Office investigation into the allegedly criminal manner in which another company owned by Tiborcz won EU-funded contracts to renovate streets lights around the country. The two are business partners in another company, BDPST Zrt.).

According to Magyar Narancs, Tiborcz has interests in Keszthely campsites as well. He also owns the Ranolder Villa in Badacsony. Real estate in the area around the villa has reportedly been acquired by other businessmen with ties to Tiborcz.

Companies connected to Tiborcz are heavily involved in construction in the area, renovating and expanding sailboat docks around the lake (also a state-subsidized investment). As the government continues to push for more sailing and e-boat usage on Lake Balaton (petro-fueled motors are not allowed on the lake), many anticipate the dock-building business to grow considerably.

It is important to note that, while the Magyar Narancs piece focuses on the Lake Balaton region, both Mészáros and Tiborcz have businesses that have been and are the beneficiaries of very lucrative state- and EU-funded contracts around the country.