The losses were the result of an embezzlement scandal at the brokerage in 2003. Excluding these losses, the brokerage was profitable in 2005.
K&H Equities’ turnover increased 188% to Ft 1,39 billion in 2005, giving it a 14.4% share of the market. The brokerage had total assets of Ft 19.48 billion at the end of 2005, 33.5% more than twelve months earlier. Net assets increased 174% to Ft 2.78 billion. K&H Bank injected Ft 6.26 billion into the brokerage in 2005.
The trial of broker Attila Kulcsár, who was at the center of the embezzlement case, along with 21 other parties, including the brokerage’s former CEO Tibor E Rejtő, started on May 3, 2006. Those on trial are accused of misuse of Ft 23 billion, of which Ft 8.3 billion was lost. Assets of seven of the defendants as well as four companies worth a combined Ft 6.3 billion have been frozen.
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