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Police probing 2007 TvNetWork capital raise on suspicion of fraud

The Budapest Police have launched an investigation of a capital raise that telecommunications-service provider TvNetWork conducted in October 2007 on suspicion of capital-investment fraud, the business daily Napi Gazdaság reported on Thursday, citing an anonymous former shareholder and TvNetWork financial director Attila Nemes.

Budapest Police press official Endre Kormos confirmed the investigation to the newspaper, adding that an unnamed suspect has been identified in the case.

TvNetWork decided at an October 29, 2007 AGM to conduct a capital raise through private placement of 2 million shares at HUF 300 per share. ICE DSL purchased all 2 million shares in the spring of 2008, when TvNetWork's share value rose from HUF 260 to HUF 360 before receding back to the former level.

Nemes denied that the capital raise was fraudulent, noting that the company purchased several networks with the capital.

TvNetWork's shares trade in the B-category at the Budapest Stock Exchange. (MTI-Econews)