Shares in BSE-listed ITC and defence group 4iG plunged 14.5% on August 17 to HUF1,590 (€4.4), wiping roughly HUF80bn from its market value, after Prime Minister Peter Magyar said his government would conduct a comprehensive review of the company’s financial, ownership and contractual links with the Hungarian state, financial website Portfolio.hu reported. The fall was the stock’s sharpest since the Tisza Party’s sweeping April election victory and left 4iG valued at roughly HUF476bn, down from its peak of HUF1.4 trillion.

The review is one of the clearest tests yet of the new government’s pledge to unwind or scrutinise business arrangements established during Viktor Orban’s 16 years in power. Magyar made transparency, public procurement and accountability for state assets central elements of his political programme.

The investigation was formally ordered in a government decision published in the official gazette last week. It covers the ownership, financial, economic and contractual relationships between the Hungarian state and 4iG, as well as companies directly or indirectly owned by the group.

Four ministers have been assigned responsibility: the ministers for economic and energy affairs, defence, finance, and science and technology, reflecting the broad-based business ties 4iG had established with the state over the years.

In an eight-minute Facebook video posted on the symbolic 100th day of the new government's tenure, Magyar said the review would go beyond any individual contract or transaction, examining 4iG’s broader expansion and its dealings with the state under the previous Orban governments.

These include state-backed financing, the restructuring of former broadcaster Antenna Hungaria, the acquisition of Vodafone, defence-industry transactions and major contracts with the state. The prime minister has presented 4iG as a company that evolved from an IT systems integrator into the country’s largest telecommunications, IT, defence and space group.

4iG has transformed from a small domestic IT services firm into one of Central and Eastern Europe’s leading technology and defence groups. Its transformation was closely aligned with the Orban government’s push to develop national champions in these segments.

The scale of the growth is visible in 4iG’s books. Group revenue surged from HUF16bn in 2016 to HUF745bn last year,  while EBITDA jumped from HUF0.9bn to HUF289bn in the same period. Total debt stood at HUF1.01 trillion and net debt at HUF868bn at year-end. 

The company’s telecommunications holding generated HUF635bn in revenue, HUF303bn in EBITDA and HUF118bn in net profit in 2025.

One of the central transactions under scrutiny is the takeover of Antenna Hungaria. In 2022, 4iG merged its telecommunications assets with the state-owned broadcaster and infrastructure company through a two-stage capital increase worth HUF534bn, ultimately giving 4iG a 76.78% stake while the state retained 23.22%.

In January 2023, Antenna Hungaria and the Hungarian state acquired Vodafone Hungary at an enterprise value of HUF660bn, with 4iG taking an indirect 51% stake and the state 49%. Financing included long-term loans from the state development bank MFB and Eximbank. 

2025 accounts show an outstanding €99mn MFB loan and €749mn Eximbank loan related to the acquisition. The review is expected to examine both the transaction and its financing structure.

The investigation also comes as 4iG has rapidly expanded into the defence sector. Last year, it acquired a majority stake in former state-controlled vehicle manufacturer Raba, eventually taking 74.34% of the shares.

The company, owned in part by Gellert Jaszai, the former right-hand man of Hungary’s richest man, Lorinc Meszaros, has also built a broader defence portfolio through transactions involving the state-owned N7 Holding and has gained interests in half a dozen defence companies. Among them is Rheinmetall Munitions, while 4iG also acquired full ownership of Austrian ammunition and mortar producer Hirtenberger.

The transaction with Raba progressed further this year as 4iG agreed to sell a 49% stake in the project company holding stakes in Raba to Czech defence group Czechoslovak Group (CSG), which would give CSG an indirect 36.75% influence in the Gyor-based company. Raba shares surged 120% last week after the deal got clearance from competition authorities.

Defence contracts have become particularly politically sensitive. In March, shortly before the April election, the outgoing Defence Ministry signed a HUF1.31 trillion framework agreement with 4iG’s space and defence technology subsidiary.

The agreement runs until 2035 and concerns the digital development of Hungary’s command-and-control system. Since taking office, the government has said it wants the contract reviewed.

Separately, 4iG and the Hungarian Defence Forces signed two framework agreements in March worth up to a combined €4.1bn for military trucks, combat vehicles and related services through 2030.

The company has defended its expansion as a commercially driven transformation and has rejected claims that state transactions amounted to a bailout. It claims that the 2022 Antenna Hungaria transaction complied with legal and regulatory requirements and was supported by independent advisers.

4iG stressed that its telecommunications business has become a substantial profit centre: in 2025, 85.6% of the telco holding’s revenue came from Hungary, while business-to-government revenue accounted for less than 5% of the holding’s total revenue.

The state relationship also extends beyond direct contracts. 4iG was the largest beneficiary of the National Bank’s Growth Bond Programme, raising HUF389bn through three bond issues by 2021. Its 2025 annual report shows that bonds remain a major component of its financing structure.

4iG share had been one of best performers on the Budapest bourse in 2025, rising 351% during the year to HUF4,170 at the end of December and giving the company a market capitalisation of HUF1.25 trillion. The share price peaked at just below HUF5,000 in November.  

Investors began dumping the shares weeks before the April election as markets priced in a change of government. The sell-off intensified after Tisza took power. The subsequent collapse of the share price reflects a dramatic reassessment of how much of that valuation depends on continued access to state-linked contracts and transactions.

Political analyst Szabolcs Dull argues that the government’s announcement sends a clear message that there will be no political settlement with 4iG or its owner, Gellert Jászai. 

For months, there had been speculation about whether Jaszai might negotiate an arrangement with the new government to shield parts of the 4iG group or certain state contracts from scrutiny. Magyar Péter’s decision to launch a comprehensive review suggests the opposite: 4iG will not receive preferential treatment, and the government’s broader accountability drive will extend fully to the company and its extensive business ties with the previous Orban government.

The review is at an early stage, and the government has not alleged wrongdoing in any specific transaction. Its findings could nevertheless have significant implications for 4iG’s future access to state contracts, financing and strategic assets, all of which have played an important role in the group’s rapid expansion in the past ten years.

For investors, the investigation adds a new layer of political uncertainty to the group’s already substantial debt burden and the risks involved in integrating and expanding its businesses, potentially affecting both future earnings and the company’s valuation.