MFB-Transelektro deal investigated

Sights

The acquisition of a 42% stake in financially challenged Ganz Transelektro Villamossági Rt (GTV) by state-owned Hungarian Development Bank Rt (MFB) in September 2004 violated the latter’s investment policy, the State Audit Office (ÁSz) found in a recent audit. While MFB’s investment guidelines identify potential investment targets as financially stable companies with a successful track record, good growth prospects and a positive earnings outlook, Ganz Transelektro had been generating massive amounts of loss for two years when MFB decided to invest Ft 4.9 billion. In the information of daily Népszabadság, MFB requested the ethical committee of the Hungarian Chamber of Auditors to investigate into the professional conduct of GTV auditor Ernst & Young Kft, suspecting that the latter’s reports presented the struggling company in a too favorable light and left the investor unaware of financial risks. (Nb)

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.

Support the BBJ

Travel