A few months ago we wrote about how 2025 could be Hungary’s Big Chance. In the story we mentioned how the then Head of the Hungarian National Bank was a fervent advocate of green finance. Today the man at the helm of the central bank has changed, and questions have been raised about whether Hungary’s national bank is bankrupt.
György Matolcsy will be remembered as the man who tried to balance the books during some of the most challenging times in modern Hungarian history. Some people will also remember his son, Adam Matolcsy, who has come up in the news more frequently since 2023.
Direkt36 is a non-profit investigative journalism centre in Hungary. It has been looking into the affairs of Adam Matolcsy for several years now. Direkt36 has alleged that Adam owes much of his business success to the Hungarian National Bank, which is run by his father.
“Thanks to family support, Matolcsy and a business circle linked to him have been able to acquire significant wealth in just a few years,” Direkt36 shared last year. Wealth that has helped Adam build a small hideaway in Dubai, alledgedly at the expense of the Hungarian taxpayer.
How Much Has Gone Missing from Hungary’s National Bank?
A report from Bloomberg this morning has dredged up the past. It highlighted how in 2016 György Matolcsy was accused of funnelling $1 billion to six foundations he had set up. Today, due to further activities in the meantime, this figure has been revised to $1.4 billion. The foundation is now one entity called PADME, and more than 80% of these funds are from the taxpayer.
Much of this activity, Matolcsy attempted to remove from public scrutiny. However, the Constitutional Court of Hungary made sure that many of the transactions remained visible.
An ex-employee of the Hungarian National Bank, Dr. László Windisch, heads up the Hungarian State Audit Office since 2022. Last week his department closed its investigation into the Hungarian National Bank and released its results. The results included claims from the Audit Office including:
The Hungarian National Bank’s investments into real estate are not sufficiently transparent. Purchases made in the name of the bank did not undertake sufficient due diligence. Criminal complaints have now been filed against the financial manager of the foundation, PADME, the moneys were transferred to.
What About the Future of the Hungarian National Bank?
It was only a few weeks ago that a new head of the Hungarian National Bank was appointed. Mihály Varga took over this March and vowed to rebuild trust in the central bank. Varga was previously the finance minister of Hungary, someone who knows Orban very well.
In some reports it has been recognized how in 2020 there was a plan to bring the activities of the Hungarian National Bank’s related companies to an end. In this way bringing all the investments back into public ownership.
It looks straightforward at first glance. A few days before the change of leadership at the Hungarian National Bank, there was a change of PADME’s asset manager. The management of assets was transferred from Optima Befektetési Alapkezelő to the Central European III Private Equity Fund, which is managed by Quartz Befektetési Alapkezelő Zrt., a company linked to István Száraz.
According to multiple sources, several dozen company executives received letters from PADME about the change. In these letters, the author allegedly “directed and organized both the private equity-based Quartz team and the GTC and Ultima deals rooted in the central bank.”
Allegations about Adam Matolcsy’s involvement in the matter continue. Especially as it is widely believed that István Száraz is part of Adam Matolcsy’s close circle of friends.
Will the new Head of Hungary’s National Bank be able to cope with the amount of intrigue emanating from the bank? Will the transfer of $1.4 billion from the bank somehow be made up? It’s hard to say. But, knowing Orban, a witch hunt against Matolcsy (and, potentially his son) will now commence. A witch hunt we will be watching closely here at DisruptionBanking.
Author: Andy Samu
