Hungarian airline robbed, executives convicted
The defendants, the managers of the Hungarian airline Malév, caused a total financial loss of more than HUF 800 million (EUR 2.1 million) to the airline, which went bankrupt in 2012. The case has now been decided at first instance. The court found the former Chairman of the Board of Directors of the Hungarian airline and one of its former CEOs guilty.
The Malév-case
A judgement of first instance has been reached in the Malév-case, the Budapest Chief Prosecutor’s Office has announced. It revealed that the Metropolitan Court found the former chairman of the board of directors of the Hungarian airline and one of its former CEOs guilty, vg.hu reports.
According to the indictment, the former chairman of the board of directors of Malév instructed the company’s two CEOs to conclude consultancy contracts with a company in which he had an interest, the Budapest Chief Prosecutor’s Office said in a statement.
In accordance with the instructions of the majority owner president, the other two defendants concluded a total of three consultancy contracts with the company in the case in 2007-2008. On the basis of these contracts, Malév subsequently paid the amount of the commission fees without any actual work done. This may have occurred because one of the CEOs issued false certificates of completion for consultancy tasks not actually carried out.
Money laundering
The sums involved were huge.
The defendants’ actions caused a total financial loss of more than HUF 800 million (EUR 2.1 million) to the Hungarian airline. Malév finally went bankrupt in 2012.
The funds transferred by Malév were then transferred by the President and the CEO who issued the false performance certificates to companies of their own interest.
Malév’s Chairman of the Board of Directors since March 2007 had been Russian businessman Boris Abramovich. Between 1999 and 2007, the State Privatisation and Asset Management Corporation (Állami Privatizációs és Vagyonkezelő Rt., ÁPV) was the majority owner of Malév. The remaining 0.5% was held by smaller investors. In 2007, ÁPV Rt. finally sold Malév for HUF 200 million (EUR 526,664) to AirBridge Zrt., a company controlled by Boris Abramovich.
The judgement
In its judgment, the Metropolitan Court of Budapest found the former chairman of the board of directors (as instigator) and the former managing director, who issued false performance certificates, guilty of continuous misappropriation of funds and money laundering causing particularly significant financial loss. The court sentenced both defendants to 2 years’ imprisonment and a fine of HUF one million (EUR 2,633).
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