Report: Zsolnay placed under custodial oversight

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Hungarian state-owned liquidator Nemzeti Reorganizácios Nonprofit placed Hungarian porcelain maker Zsolnay under custodial oversight, and a custodian is expected to arrive at the company’s base in Pécs today, Csaba Kovács, the liquidatorʼs managing director, confirmed with Hungarian government-friendly daily Magyar Idők.

The custodian is being sent to the company to oversee the assets of Zsolnay, as the ownership feud between minority owner Pécs council and majority owner Najari Bachar, a Syrian businessman, continues to grow. 

The presence of the custodian is required by law, regardless of whether the party who launched the liquidation procedure requested it, because the company was earlier declared of “strategic importance” by the government, Kovács said, according to Hungarian news agency MTI. Pursuant to this, the liquidation process must be completed within 270 days, as opposed to the usual two years, he added.

The arrival of the custodian does not signal that the liquidation has begun, rather that the courtʼs declaration requires Zsolnay to acknowledge its liability, and Zsolnay may ask for a 45-day grace period in which to repay its loan, Kovács added, according to MTI. If this fails to take place, the court will declare Zsolnay insolvent and order its liquidation, he added.

The management may appeal the courtʼs decision, but a binding decision would be taken within a couple of weeks, the managing director said, according to MTI. He added that the custodian is being sent to the base to prevent assets from being taken out.

A company close to construction firm West Hungaria Bau initiated a liquidation procedure against Zsolnay after it acquired ownership of a HUF 413 million loan that the company had owed to the state-owned Hungarian Development Bank (MFB), Hungarian news agency MTI reported yesterday.

The majority-owner said last week his company has “come under attack by a group lobbying to take over business”. In mid-April, he aired concerns of what he called a “hostile takeover”.

The staff of Zsolnay resigned from their jobs on June 7 en masse, effective immediately, abandoning the company for the newly formed Ledina Kerámia, which was set up by the municipal council of Pécs. Magyar Idők reported today that the staff left the company due to “psychological pressure and spoilt morale”. 

Cabinet Chief János Lázár said at the beginning of June that the Hungarian government “backs the efforts by the municipal council of Pécs”. He added that the Hungarian government has taken the side of the local council of Pécs in the “Zsolnay matter”. He said that the “apparent owner” of Zsolnay cannot count on further support from state-owned MFB or the government.

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