Hungary: Commission investigation of MÁV Cargo
State-owned Hungarian railway company MÁV has received official notice of an investigation into a commission paid a small Hungarian company related to the privatization of MÁV’s freight unit MÁV Cargo, but MÁV continues to insist it has no connection to the company and followed the letter of the law in the privatization, MÁV spokesman Imre Kavalecz told MTI on Thursday.
In late February, Hungarian police informed the Justice Ministry, they would start an investigation based on a report in an Austrian newspaper that the small Hungarian company Geuronet is to receive a €7.1 million ($11 million) commission for the sale of state-owned Hungarian railway company MÁV’s freight unit to Rail Cargo Austria. A consortium of Rail Cargo Austria and GYSEV signed a contract in January to buy MÁV Cargo for Ft 102.5 billion ($615.3 million) and invest Ft 43.5 billion in the company within five years. Austrian business weekly FORMAT wrote that Geuronet’s commission - to be paid, when the transaction is closed - was 1.75% of the purchase price. MÁV said in a statement at the time that it had no knowledge of Geuronet and never had any kind of connection with it. MÁV insisted it sold MÁV Cargo in a procedure that excludes the possibility of undue influence.
In the latest issue of Hungarian trade industry journal Magyar Közlekedés, Rail Cargo Austria board member Gustav Poschalko defended the company’s contract with Geuronet. “Geuronet was commissioned for its advisory services and not for its lobbying skills, because we did not require the latter. Today I know, that lobbying requires authorization in Hungary. Unlike in Austria. The Austrian press did not differentiate between the two services, which caused the misunderstanding,” Poschalko said. (MTI-Econews)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
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.