Minister for National Development Miklos Sesztak’s Russian/Ukrainian connection

July 1, 2014


Hungary’s new Minister for National Development, Miklos Sesztak, (pictured) was involved in the incorporation and legal representation of hundreds of Ukrainian- and Russian-owned companies at two addresses in Kisvarda, Hungary.  Many of the companies were subsequently liquidated for failing to pay taxes.

At the turn of the millennium, the only way to import Amway products to Russia or Ukraine was to establish a company in Hungary to purchase the company’s products (chemicals, cosmetics and dietary supplements, etc.) from Amway’s country importer for re-export to countries farther east.

Two thousand such companies were registered between 1996 and 2004. In 2005 news weekly Figyelo wrote that seven hundred such companies had been incorporated in Szabolcs-Szatmar-Bereg county and that all were registered to two addresses in the town of Kisvarda. Last week, Hungarian news portal revealed that Sesztak had been the companies’ incorporating attorney as well as their legal representative.

According to, the companies were incorporated under the names of Ukrainian and Russian individuals. ATV writes that the companies involved in the scheme were incorporated because Russian and Ukrainian citizens wanted to sell Amway products in their respective countries.

The Russian and Ukrainian individuals incorporated in Hungary for two reasons: first, Amway did not have a presence in their respective countries until 2004, and secondly, foreign companies were not allowed to partner-up with Amway Hungaria Kft. (Amway’s Hungary-based business).

These newly-incorporated businesses would then contract with Amway Hungaria Kft., then enter into export agreements to ship the products to the Ukraine and Russia. Between 2001 and 2004, purchases of merchandise from Amway Hungaria Kft. grew tenfold.

In 2004 Amway established an official business presence in the Ukraine and Russia, eliminating the need for Hungary-incorporated intermediaries. At that point these businesses were left to die. Many were eventually wound up by receivers having accumulated large debts.

Sesztak is also known for his alleged involvement in a scheme to defraud Hungary of USD 56 million in EU subsidies

Sesztak, who is a member of the Christian Democratic People’s Party (KDNP), was elected to parliament in 2010 where he served as chairman of the Subcommittee on Public Procurement and Business Regulation, a member of the Economics and Information Technology Committee and as a member of the Subcommittee on Information Technology and Communication.

During much of this time Sesztak also sat on the supervisory committee of EnterNet Invest Zrt. whose Hungarian affiliate, EnterNet 2011 Kft. and four other companies, all registered to the same address at the same time, received some USD 56 million in grants with which to develop broadband internet in the Hungarian countryside.

Sesztak’s conflict of interest came to light after it was revealed by the European Anti-Fraud Office (OLAF) that no work had been performed on any of the 13 projects awarded to the five companies in 2012.

Referenced in this article:

Így működött a Seszták-féle cégrendszer,; 27 June 2014
Gyanús, eltűnt cégek alapításában vett részt Seszták Miklós,; 26 June 2014