Creative accounting at MVM Group

Police interrogated the former deputy CFO of Paks Nuclear Power Plant (PNPP) and Magyar Villamos Művek Zrt. (MVM) as a suspect of misappropriation and cause of exceptionally large asset detriment. The Economic Crime Division of National Bureau of Investigation (NBI) instituted proceedings against Laszlo Molnar because of a forty million HUF (approximately 150 000 EUR) consultancy contract from 2008.

The company was contracted – for thirty million- lump sum plus a daily fee of two hundred thousand forints – to conduct a study the opportunities of a power plant expansion. The contract of agency was signed by Laszlo Molnar and he certified the completion as well. According to the police the paper is worthless, it is a collection of copy-pasted sections of previously written documents. The police is investigating MVM’s ten other investments and transactions from 2006 – 2008 besides the present HUF forty million worth contract. The NBI anonymously confirmed that the case has a suspect who is defending himself at large.

The contract in question became public due to the Energiaklub’s (Energy club, hungarian NGO) freedom of information request demanding the delivery of documents related to the plans to expand the Paks Nuclear Power Plant, which was called the Teller-project. PNPP denied the request but due to the judgment of the Second Degree Court of Szekszárd in April the request had to be fulfilled. The contracts are available on the Energia Kontroll Program’s (Enegry Controll Programme) homepage.

The 40 million forint contract is only the tip of the iceberg – millions of euros ended up at offshore companies with unknown owner background from MVM during the investigated period of time. The involved offshore companies are connected to the same group of persons who received the admission from MVM to conduct the „copy-pasted” study, furthermore they are in connection with the Ferencvárosi Torna Club’s (football club) dubious real estate case as well.

Lehet Más a Politika (politics can be different, green party) was suing for the documents of the internal investigation, which started after the suspicion of a series of suspicious transactions since 2009. Due to the judgment of the second degree court MVM delivered the documents in June 2011, however due to the significant erasing, much the contents of the documents are unreadable. Thus atlatszo.hu filed further freedom of information request in the case meanwhile released the MVM documents to the public.

>>> Agreement between MVM, Aquifex Ltd. and Meinl Bank (English, Hungarian, PDF)

>>> Statement of the Cyprian manager of Aquifex Ltd. (English, Hungarian, PDF)

>>> Lease contract of Jadran Investments Ltd. (Hungarian, PDF)

>>> Report of Director and Unaudited Financial Statements of Jadran Ltd. (English, PDF)

>>> Company history of Esplanade Hungary Tanácsadó Kft. (Hungarian, PDF)

>>> Background: Constitutional cost of MVM (Hungarian, Élet és Irodalom 10 Sept, 2010)

>>> Background: Circular data protection (Hungarian, Élet és Irodalom 20 May, 2011)