MKB cancelled sale of artwork to MNB foundations after HVG broke story

May 9, 2016


The six Pallas Athéne foundations established and generously endowed by the National Bank of Hungary (MNB) under central bank governor György Matolcsy resolved to purchase HUF 1.8 billion worth of objets d’art from the MKB Bank reports print weekly Magyar Narancs.  Hungary’s central bank officially denied its foundations intended to do so after print weekly HVG reported that each foundation had resolved to acquire HUF 300 million worth of art from the state-owned bank which MNB was tasked with reorganizing.

Based on a review of documents released by the MNB’s foundations last Friday, which include minutes of MNB executive board meetings, Magyar Narancs reports that each of the six foundations formally decided to purchase HUF 300 million worth artwork from the MKB Bank.

Moreover, it appears that members of the various boards of trustees were involved on both sides of the transaction.

Magyar Narancs that former central bank vice president Ádám Balog, who left MNB to serve as the head of the nationalized bank, also served as a trustee on the MNB’s FADS foundation alongside Marianna Polt-Palásthy, the wife of Hungarian chief prosecutor Péter Polt.

According to the print weekly, MKB Bank then held a closed auction for which only the six foundations were invited to bid on the paintings.  Magyar Narancs reports that MKB actually invoiced the foundations for the artwork, but that MKB subsequently cancelled the auction (with retroactive effect) and asked that the invoices be returned.

A bold-faced lie

In early March, MNB called “entirely false and misleading” reports that its foundations planned to purchase artwork from MKB.  According to Magyar Narancs, it was the central bank’s statement that was entirely false and misleading.  Meanwhile, the MNB foundations backed away from purchasing the artwork.

Hungarian news site says it is likely the MNB’s foundations would have gone through with the had HVG not broken the story.