One of Hungary’s largest media agencies is accused of budget fraud. The Initiative media agency arranges the purchase of media space in Hungary for such well-known partners as LEGO, Euronics, Zwack and Porsche Hungária. The company denies the allegations, saying that its business practices were in full compliance with the legislation in force.
The National Tax and Customs Office (NAV) has launched an investigation against one of Hungary’s largest media agency, the Initiative. The financial authorities carried out a house search at the media giant, after which NAV placed its accounts under criminal seal.
The company arranges the purchase of media space in Hungary for such well-known partners as LEGO, Euronics, Zwack and Porsche Hungária. According to the Hungarian news portal Media1,
investigators made a house search at the company and one of its clients, as well as a media service provider last week, and seized evidence of budget fraud.
In the case of Initiative, the authorities froze the company’s bank accounts. The agency is suspected of budget fraud.
Following the incident, NAV informed the company’s partners of the case. For the time being, it remains to be seen how Initiative will be able to pay for advertising purchased from media outlets by companies partnered with the agency. In response, the media agency Initiative has sent a letter to its partners stating that it believes its business practices were in full compliance with the legislation in force and that the company has undergone several other investigations in recent years without any findings – as reported by hvg.
According to Media1, the closed media buying agency has handled the full range of media acquisitions for major clients such as Carslberg, Euronics, Béres, LEGO, Bunge, Tchibo, Intercom, Pápai Hús, Porsche Hungária, Zwack.
Initiative has acquired platforms through Atmedia (which owns 40 TV channels, including TV2 Group), RTL Hungary and “a sales house selling almost all digital media platforms in Hungary.”
As a result of the freezing of the accounts of one of the largest media agencies operating in Hungary, it is uncertain what will happen to the company’s partners’ summer advertising campaigns. According to estimations,
the amount owed to media and sales house partners might be as much as HUF 500 million (~ EUR 1,26 million).
According to the company’s statement, the result of the current proceedings will confirm within a short time that Initiative acted in full compliance with the legal and professional requirements in the case in question. They added that they „rely on the stable and high quality professional background provided by the company’s staff and the parent company during the proceedings of the tax authority, so that the conditions for providing their clients with a quality service remain unchanged.”
Source: media1.hu, hvg.hu