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Hungary's case against local unit of Arthur Andersen continues

The Hungarian state's case against the local unit of US accounting firm Arthur Andersen continued in the Municipal Court of Budapest on Wednesday as experts were called to testify.

The state sued the accounting companies Deloitte Könyvvizsgáló és Tanácsadó, Prudentia Könyvvizsgáló és Tanácsadó and Arthur Andersen in 2001 for providing misleading information on the financial position of Postabank between 1994 and 1998. The state sought compensation for a combined HUF 170 billion in damages for capital raises it had to make at the bank in 1997 and 1998 based on its audited balances and the additional costs of bailing it out, but the amount was eventually lowered to HUF 50 billion after some losses were recouped.

Hungary's Supreme Court “dismissed” Deloitte and Prudentia from the case earlier because of procedural problems. But the state continued to seek damages from Arthur Andersen Adó- és Vezetési Tanácsadó which acted as a consultant, not as an accountant.

János Burai-Kovacs, a lawyer for Arthur Andersen Adó- és Vezetési Tanácsadó, told MTI after the closed hearing that the case could drag on for another 2-3 years. The company has no assets, thus it cannot pay the state's claim, he added. (MTI-Econews)