Hungary: Energy trading connections of MET & Hungary, A network of companies that shares an address in Zug, SEE Energy News
The opposition Democratic Coalition is calling on Prime Minister Viktor Orban to cancel all contracts between Hungary and MET, a Swiss-based energy trader. As FreeHungary reported earlier the Swiss newspaper Basler Zeitung published Berhard Odehnal’s article titled ‘A network of companies that shares an address in Zug and a loyalty to Hungrian prime miniser Vikor Orbán’. The article states, that Hungarian oligarchs want to participate in the international exchange of commodities. This is why the network of companies was formed in the canton of Zug.
DK board member Szabolcs Kerek-Barczy told a press conference that the Hungarian state was using MET as an middleman to obtain natural gas cheaply and sell it to retail consumers at a significant profit.
Kerek-Barczy said MET had an unclear ownership structure and he called on Orban to brief parliament why Hungarian taxpayers’ money was used to support “Russian oligarchs and Hungarian oligarchs”. He asked Orban to reveal whether he held any interest personally in MET or other gas traders linked with Hungary.
On January 5, the green opposition LMP party’s co-leader, Bernadett Szel, demanded access to contracts signed by Hungarian energy company MVM and MET.
MVM imported gas via Austria at discount prices between 2011 and 2014 with the involvement of MET — a company said to be close to the ruling Fidesz party — as a middleman, the green party said. MET was able to resell the gas with profits of tens of billions of forints each year, it added.
MVM has not provided satisfactory answers to date as to questions such as why it had been necessary to use the MET subsidiary as an intermediary or on what terms MVM allowed the company to sell the cheap gas from western Europe, the statement added.
The prime minister does not own an energy company or any other venture, Bertalan Havasi, the cabinet’s press chief, said and added that anyone claiming the opposite will be prosecuted. Rather than asking “sly questions”, Kerek-Barczy should come forward with his claims and bear the consequences, Havasi said in a statement.
As we reported last year, based on TagesAnzeiger, the Swiss newspaper Basler Zeitung published Berhard Odehnal’s article titled ‘A network of companies that shares an address in Zug and a loyalty to Hungrian prime miniser Vikor Orbán’. Hungarian oligarchs want to participate in the international exchange of commodities. This is why the network of companies was formed in the canton of Zug.
Benjamin Lakatos calls his enterprise a „European success story”: a commodity trading company which is only a few years old but which is already a member of the biggest players; which from an initial investment of 200.000 EUR a few years ago, this year is expecting an income of 3.8 billion EUR; which has opened offices in Eastern Europe and in London, but which is based in Zug, Switzerland. And whose manager, Lakatos is convinced that they are going to „change the game fundamentally in Central Europe”.
The 38-year-old Hungarian living in Swytz canton wants to change the game through holding called MET. MET stands for MOL Energy Trading. MOL Hungary is a party state-owned oil and gas syndicate. MET Holding was registered in Zug in 2012, and has since established several subsidiaries, whose headquarters are at the same Zug address: MET Management, MET Power, MET Marketing, MET International. Lakatos is the President and Chairman of the Board of all of them.
Since 2014, he is also a part of a new investment company in Zug, called Erigo, the parent company of which is active in Angola. Lakatos told TagesAnzeiger that he will always consider Hungary as his homeland, „but the business goes on in Switzerland”.
MET has become famous in Hungary for its unclear ownership structure. The fact-finding portal, Átlátszó (Transparent, the Hungarian Wikileaks) revealed the structure through the firms on Cyprus and the Cayman Islands to the real owners: the oligarchs with a standing great relationship with Hungarian Prime Minister, Viktor Orbán.
MET was founded in 2007 by the managers of MOL energy syndicate. MOL is still the 40% owner of the Holding in Zug. A further 50% is owned by WISD Holding – WISD used to be called RP Explorer Funds, and is registered in Cyprus. According to Átlátszó, they are in possession of several offshore companies. The company registers of Cyprus support this claim.
The VIP grandstand as a meeting place
One example is Inather Trading. This is owned through another company by a Hungarian entrepreneur, István Garancsi, who is active in both the financial and sporting worlds. Garancsi saved Fehérvár SC football club from bankruptcy in 2007.
This allowed him to enter the innermost circles of power, as Fehérvár has a well-known fan: Viktor Orbán. The club’s VIP grandstand is a meeting place of oligarchs and pro-government politicians. Garancsi also has a savings bank that participated in the funding of a stadium built in Felcsút, Orbán’s village. When the government nationalized all of the Hungarian savings banks last year, his business was spared.
MET has another owner, György Nagy. He was a founding member of the Wallis investment group, and he also owns a company called Ho-Me 2000 which, through which he is linked to another of Orbán’s protégé’s, bank manager Sándor Csányi. In July 2014, the Hungarian press reported that Ho-Me 2000, along with Csányi built a huge slaughterhouse in the South of Hungary.
Twice as much pork
As the government wants to double pork production by 2020, Nagy and Csányi receive a state aid of 1.5 billion HUF. Also, according to the news, they are among the biggest beneficiaries of the EU grant funds. Csányi is also the vice president of the MOL syndicate, and a frequent guest at the Fehérvár SC’s VIP grandstand.
The rise of MET is also linked to Orbán. After the victory of the 2010 elections, the new Prime Minister promised its voters the reduction of energy costs. In order to keep down the prices, MVM, the national gas company could tap into the reserves, and could buy gas on the world market at a low cost. However, the gas was not only sent to the ranks, but some of it was passed on to MET Hungary, who in turn sold i tat a greater price in the Hungarian market. The government has never given an answer as to why an intermediate trader was necessary.
„Recognition as a Swiss company”
The contract between MVM and MET was leaked to the media. According to Átlátszó, MET allegedly made a profit of 50 billion HUF. Shortly after this, MET Holding was founded in Zug. Why was it moved to Switzerland? Benjamin Lakatos said that favorable taxation was one of the many reasons. He listed the simplicity of accounting and the bank system: “But the biggest advantage is that our international partners recognize us as a Swiss company. Today we are a full member of the Energy Trading Club.”
Lakatos is less talkative when it comes to the owners of his holding. He doesn’t want to name the owners of MET Management Company and another company of Zug, Deneb Algedi – which is a co-owner of WISD Holding at the same time. A glance at the company register and it becomes evident: Lakatos himself founded both companies, and are entirely in his possession at the value of 2 billion francs. As Lakatos says: a search for tax optimization opportunities is not against the law, the ownership structure “is up to the shareholders to decide”.
Lakatos also says that his company has nothing to do with politics. This is hard to imagine in the Hungary of today. A control over energy economy is particularly important to Viktor Orbán. Foreign companies have been pushed out of the market, their shares in Hungarian companies have been purchased by the state, and in order to achieve all of this, he was ready to compile even more debt.
Susceptible to corruption
The United States Embassy in Budapest noted in a secret report in 2010 – published by WikiLeaks – that the energy economy is particularly susceptible to corruption: a powerful lobby prevents the opening of the market; the major parties are financed by syndicates: socialists especially by MVM gas syndicate, Orbán’s Fidesz by MOL oil syndicate.
Independent energy expert, András György Deák says that Hungarian economy is still ruled by the “modus vivendi” rule: “There is a tacit agreement about who gets what.” Nowadays, the biggest decisions are made during football matches, in the VIP box – he criticizes in one of the reports of Transparency International Hungary.
According to the critics of the government, the rise of the Swiss MET is also in relation to the power-shift in Orbán’s surroundings. The old oligarchs are losing their influence; young managers are the new protégés. Orbán wants to avoid anyone in his environment from gaining too much influence. Some entrepreneurs, who have architectural and media companies – and also company contacts in Switzerland – are less often seen in the VIP boxes. Others are seen more often. The owners of MET Holding are obviously on the rise.
source: galamus.hu; Basler Zeitung; MTI
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