Windfall of EU funds, bank loan awarded to micro-company owned by MOL CEO Zsolt Hernádi

October 5, 2017

Windfall of EU funds, bank loans awarded to micro-company owned by MOL CEO Zsolt Hernádi
Photo:án Huszti

Gete Völgye Zrt., a small company owned by the CEO and chairman of Hungarian energy company MOL, Zsolt Hernádi (pictured), recently won HUF 93 million (USD 352,000) from the EU rural development fund, reports Magyar Nemzet. The same company turned over only HUF 1 million (USD 3,780) in profits in the past two years.

Gete Völgye Zrt., which grows grains, employs only two people and was registered in 2013 in the Komárom-Esztergom county town of Dág. The company only became active in 2015, and has since posted nearly non-existent profits.

According to Magyar Nemzet, despite the company’s lack of economic activity, it received HUF 30 million (USD 113,000) in funding from “other sources” in the last two years, and a loan worth more than HUF 140 million (USD 530,000) from OTP Bank.

Taken together, the contributions from the EU and the “other sources”, plus the generous OTP bank loan, have provided Hernádi’s small company with around HUF 263 million (USD 991,000).

The question arises of whether such a large loan from OTP was proportionate in the case of such a small agricultural company, and how a company with annual profits of around half a million forints was able to secure a loan worth HUF 140 million. It is worth noting that Hernádi was a board member of OTP Bank until 2016. His company is said to have used the loan to buy harvesting equipment, a seed drill and other agricultural vehicles and tools.