Hungarian PM's main foe throws in the towel, sells businesses and retires

Hungarian PM's main foe throws in the towel, sells businesses and retires
Oligarch Lajos Simicska, Orban's number one foe, retires from business
By bne IntelliNews July 5, 2018

Former Fidesz cashier Lajos Simicska, who broke ranks with Prime Minister Viktor Orban in 2015, is selling his entire business network to his business partner, including his remaining stakes in media that waged a bitter fight against the ruling conservative party in the recent election campaign, it was announced on July 4. The deals need the approval of the competition watchdog GVH.

After Fidesz's third consecutive landslide victory in April, the billionaire Simicska felt that there was no chance to replace Orban democratically, so he withdrew completely from public life, people close to him told Hungary's sole print opposition broadsheet, Nepszava. In Hungary, only entrepreneurs who have Orban's blessing can succeed, he used to say.

Simicska, the 13th richest Hungarian with an estimated HUF77bn (€236mn) of assets, is selling his stakes in his companies active in agriculture, construction sector, media, advertising and asset management to Zsolt Nyerges, according to a short statement released by Simicska's business partner.

Nepszava reported that the deal received approval from a confidant of Orban, which suggests that the PM had to give his blessing to the deal, which will have enormous political and economic implications.

There is already speculation that Nyerges may not be the final buyer and some stakes in Simicska's empire could be resold to businessmen close to Orban.

Simicska's billboard business is one of them. In the election campaign, he sold space to opposition party Jobbik at below market price. This served as a pretext for the state audit office to levy a fine of HUF331mn and also strip the party of state subsidies.

Simicska was suspected of financially supporting Jobbik, the main rival of Fidesz, which staged a spectacular shift from the far-right to the centre. Despite receiving 20% of the votes, however, Jobbik failed to stop Fidesz from reaching a supermajority. 

There is a high chance that Simicska's outdoor billboard companies could be swallowed up by businessmen close to Fidesz, resulting in the entire market being ruled by people close to Orban, which would have great implications in future elections.

Simicska fell out of favour with the prime minister not long after the 2014 election. He resented Orban's anti-democratic shift, his “admiration” for Russian President Vladimir Putin and his plans to silence critical media.

In an interview, he recalled that Orban told him about his plans before the 2014 elections of having the Hungarian unit of German broadcaster RTL bought up by Russia's Rosatom, the company involved in the €12.5bn expansion of the Paks nuclear power plant. RTL has the highest rating among broadcasters and is critical of the government, which clearly upset Orban.

Orban has long sought to squeeze out Simicska, who amassed huge wealth through his construction company Kozgep from state tenders during 2010 and 2014.

Simicska broke decisively from his former friend Orban in 2015 when he lashed out at the prime minister in a series of media interviews. In one famously salty outburst, he declared "Viktor Orban is spunk" to two Hungarian news portals. 

Afterwards, Simicska’s media empire become the voice of the opposition and his companies’ faced financial problems as state ads dried up suddenly and private advertisers held back for fear of losing state contracts. Only a few days after the election, he closed down Magyar Nemzet, a conservative political daily published since 1938. The future of the news broadcaster HirTv is also in danger.