Daily News Hungary

Budapest, November 28 (MTI) – Budapest’s 5th district council has rejected an allegation that it sold a large property in Dorottya Street below its real value.

Tabloid Blikk wrote that the district had sold five properties cheaply to offshore companies, adding that the council sold the Dorottya Street property for 582 million forints (EUR 1.9m) instead of 776 million.

The council said in a statement that the price reflected the downturn following the financial and economic crisis, and the paper had quoted a price which applied to before the crisis exploded. Between 2008 and 2009 property prices fell by 30-40 percent, it insisted.

Before selling a property the council always prepares an up-to-date valuation, “and this, naturally, reflects the actual market price,” the statement said.

The council added that it had engaged a developer instead of selling the property empty. It did not manage to obtain sufficient funds to renovate it, however, so they tried to involve outside investors. A tender was drawn up for the sale of half of the company while the council would have kept the other half. The tender was unsuccessful and the empty property continued to lose value in the meantime.

An open, international tender was drawn up to sell the property, the council said. The process had to conform with EU regulations, it noted, adding that a Luxembourg-registered company made the best offer. It would be wrong to qualify Luxembourg, an EU member state, as off-shore.

Earlier, news website Index said that the minority stake in a hotel planned for the property was owned by Andras Giro-Szasz, the former government spokesman who is now state secretary in charge of government communications. According to his asset declaration, Giro-Szasz holds 20 percent in Safe Port Project Kft, which is a co-owner of Dorottya 8 Hotel Kft, the website said.

At MTI’s inquiry, Giro-Szasz said the company had acquired 50 percent of the property in question years before he became co-owner, and protested against his “name being identified” with the transaction.

Photo: MTI – Zsolt Szigetvary

Source: http://mtva.hu/hu/hungary-matters

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