Curia sentences former heads of state asset management company in Sukoró case

June 8, 2017

Zsolt Császy at his Curia sentencing. MTI Photo: Tibor Illyés

“Criminals belong in jail … Gyurcsány and the Socialists committed the most corrupt governing of all time, they stole the national wealth and are guilty of abuse of power.” – Statement issued by Fidesz after the Curia overturned the second level court decision acquitting former MNV CEO Miklós Tátrai and former Sales Director Zsolt Császy of wrongdoing in the Sukoró case.

Two former directors of Hungarian National Asset Management Company (MNV) were sentenced to prison by Hungary’s highest court, the Curia, for their roles in the corruption surrounding the Sukoró casino and tourism investment case, reports index.hu. The Curia overturned a second level court decision acquitting them.

Miklós Tátrai, MNV’s former Chief Executive Director, and Zsolt Császy, former Director of Sales, had been sentenced to three years and two and a half years in prison respectively for attempted misappropriation of funds.

The Sukoró case, one of the biggest scandals of the Socialist governments led by Ferenc Gyurcsány, involved the 2008 exchange of 70 hectares of state-owned land next to Lake Velence on the outskirts of Sukoró, for 183 hectares of peripheral land near Pilis and Albertirsa owned by Israeli-Hungarian businessman Joav Blum, supposedly in order for the state to secure land for the planned M4 motorway.

An independent appraiser decided that the Sukoró land was worth HUF 1.08 billion (USD 3.9 million) while the two real estates in Pest County were valued at USD 787.4 (USD 2.9 million). The investor paid the difference at the end of that year.  A procedural error prevented the competent land office judge from registering the change of ownership, and the procedure had to be started all over again.

In January 2009 it was revealed that the investment group represented by Blum planned to build a EUR 1 billion hotel, casino and recreation center complex that would have allegedly created 2,600 jobs locally. The “King’s City” project met heavy opposition from NGOs and environmental advocacy groups. Nevertheless, a few months later Gyurcsány’s Socialist government declared the project a priority investment.

After Gyurcsány’s resignation in 2009, his successor, former development minister Gordon Bajnai initiated an inquiry into the casino project and the real estate exchange. Around the same time, officials opened an investigation into the alleged misappropriation of funds causing significant material damage to the state.

According to a report ordered by the Attorney General’s Office, the Sukoró land was underpriced in the exchange contract by HUF 737.7 million (USD 2.7 million) while the Pest County real estates were overpriced by HUF 562 million (USD 2 million). Had the investment materialized, it would have caused HUF 1.29 billion (USD 4.7 million) in damage to the Hungarian state.

In autumn 2009, the concession contract required for the operation of the casino was signed, while then-Finance Minister Péter Oszkó ordered MNV to undo the contract with Blum. If Blum was reluctant to cooperate, Oszkó ordered MNV to attack their own contract in court.

Right after Fidesz returned to power in 2010, Tátrai and Császy were taken into custody. A year later the National Assembly lifted Gyurcsány’s immunity from prosecution, and shortly thereafter he was investigated for abuse of office after then-LMP MP András Schiffer filed a complaint. The investigation was dropped in 2012 because of lack of evidence against Gyurcsány.

The same year the Budapest High Court declared the real estate exchange contract null and void. This decision was later confirmed by the Curia. Meanwhile, Tátrai, Császy and another former MNV employee, as well as an appraiser and a lawyer were officially charged.

In autumn 2014 the Washington-based International Centre for Settlement of Investment Disputes decided in favor of the Hungarian state, dismissing the Israeli investment group’s lawsuit and request for HUF 100 billion (USD 364.4 million) compensation.

In 2015 the Court of Szolnok sentenced Tátrai, Császy and the lawyer, while the two other suspects were acquitted. The sentenced suspects appealed and the second-degree court acquitted them, but the prosecutor appealed in turn.

The Sukoró scandal was a long-time weapon in Fidesz’s hand against former prime minister Gyurcsány. Prosecuting the offenders of the Sukoró scandal, including him, was one of the main promises of Fidesz’s 2010 election campaign that led to their landslide victory.

Fidesz welcomed the High Court’s sentencing.

“Criminals belong in jail … Gyurcsány and the Socialists committed the most corrupt governing of all time, they stole the national wealth and are guilty of abuse of power,” reads a statement released by Fidesz after the sentencing.