A company owned by PM Viktor Orban’s son-in-law, Istvan Tiborcz has gained a 20% stake of BSE-listed property holding group Appeninn, which is owned by Orban's friend, and proxy, Lorinc Meszaros in a deal estimated to be worth HUF6bn (€1.85mn), it was announced on August 23.
Opposition media highlighted the transaction as a milestone as it marked the first open business transaction between the Orban and the Meszaros family.
For years it seemed that the elite close to the ruling Fidesz party and the business circles around Viktor Orban tried to keep their enrichment schemes secret, opposition site 444.hu website notes. But that may have changed after a third supermajority solidified Fidesz's grip on power; cronies around the ruling party make no secret of their wealth accumulation anymore.
Meszaros is commonly referred to as the proxy of Orban. He became Hungary’s second richest man after OTP chief Sandor Csanyi with an estimated wealth of HUF280bn. Unlike Csanyi, the former gas fitter gained his wealth solely from winning lucrative state contracts.
His business empire includes companies across all sectors, ranging from tourism to banking, industry, agriculture, retail, media, energy and he has recently launched a sportswear brand by which he hopes to dethrone big multinationals like Adidas and Nike.
The former Felcsut mayor is also the founder and president of the football academy in the village, set up by the prime minister, which received the highest amount of state sponsorship of all division one clubs.
The rise of Istvan Tiborcz to the elite and conspicuous accumulation of wealth since he married Orban's eldest daughter Rahel has been spectacular but had a few taints. The EU's anti-corruption agency OLAF suspects an organised criminal activity in EU-funded public procurement projects involving Elios, the lighting company once co-owned by Istvan Tiborcz.
In a two-year investigation, the OLAF inspected 35 public lighting projects won by the company between 2011 and 2015 in public tenders involving EU funds totalling €40mn.
Tiborcz has quit the company and since turned to real estate, buying properties across the country with a special focus to the resort area Lake Balaton and castles, using state-loans and subsidies.
BDPST buys 9.7mn shares
On Thursday it was announced that the private equity fund of Konzum PE, owned by Meszaros sold its entire stake in Appeninn, 9,755,567 shares as part of an OTC transaction to BDPST, the company owned by PM Orbán’s son-in-law.
Konzum and property fund manager Konzum II still hold a combined 33% in Appeninn, which laid out an ambitious growth plan recently. It projected the value of the portfolio would swell to €479mn by 2022 as the gross leasable area of the properties is to increase to 242,000m2.
The transaction will be closed after the payment of the purchase price, which is treated as business secret by the parties but based on the market capitalisation of Appeninn, it is estimated to be HUF6bn.
TIborcz said they are aiming to become leaders in their own segment of the property development and management market and the deal provided a good opportunity to diversify their operation.
The latest acquisition reinforces widely held theories that business ties between the Orban family and Meszaros, which have long been denied, do exist and it has been a logical step that the two parties join forces, after Fidesz' grip on the economy and the society solidifies, media reports tell.
BDPST has also set up a hotel subsidiary a few days ago, which suggests the company looks set to provide hotel services in the future. These may include the 18 domestic and 5 foreign hotels of Hunguest, owned by Konzum, but also a high-end hotel in Budapest's city center owned by BDPST.
The hotel management company of Tiborcz will be run by former CEO of Kempinski, who hired Rahel Orban as a sales manager between 2012 and 2014. Orban's eldest daughter, who graduated at École hôtelière de Lausanne, one of the best hospitality management schools in the world has also taken an active role in the preparation of the new tourism strategy of the government.
In the last few days, she made headlines when she dumped a used diaper along the highway while on vacation in Croatia.