Tiborcz and Orbán celebrating Christmas in 2013 (photo from the PMʼs Facebook page).

Hungarian authorities launched the investigation after the European Anti-Fraud Office (OLAF) said it had revealed serious irregularities and a conflict of interest in several projects to modernize street lamps in Hungarian towns.

The projects, which the European Union co-funded along with Hungary, were run from 2011 to 2015 by Elios Innovativ Zrt. István Tiborcz, who married Orbán’s daughter Ráhel in 2013, was a member of the Elios board from 2009 to 2014, and sold his stake in the firm in 2015, company records show.

OLAF sent a report containing financial recommendations to the European Commission, the EU’s executive arm, and its judicial recommendations to Hungarian prosecutors. However, Hungarian police have now closed their investigation in the Elios case, finding that “there was no crime” involved, Kristóf Gál, spokesman for the Hungarian National Police, told state news agency MTI late on Tuesday.

OLAF voiced its concerns regarding Elios and the Orbán family connections in January.

“OLAF’s investigation revealed not only serious irregularities in most of the projects, but also a conflict of interest,” its press office said at the time, international news agency Reuters reported.

Ingeborg Grässle – who chairs the European Parliament’s Budgetary Control Committee, and is an MEP of Germanyʼs CDU within the European People’s Party of which Hungaryʼs governing Fidesz is also a member – said on Wednesday that the outcome of Hungary’s Elios investigation is “surprising.” She added that the OLAF report contained “strong evidence of fraudulent irregularities,” according to a report by European media platform EurActiv. The committee will need to analyze the results of the investigation, she noted.

Politico.eu, the European edition of U.S. news organization Politico, quoted Grässle as saying that the dropping of the Hungarian investigation “strengthens doubts on the independence of Hungarian law enforcement authorities and reinforces the need of a real tool to protect EU financial interests in future.”

“Even if no criminal case is opened at national level, this does not invalidate OLAF’s findings and evidence with regard to financial recovery,” an OLAF spokesperson was cited as saying by Politico.eu, indicating that the European Commission is still looking to determine whether Hungary will have to pay back funds to the EU.