Opposition urges full compensation in Buda-Cash case
Budapest, March 2 (MTI) – The Socialist opposition has called on the government and the central bank to compensate clients who have lost money due to Buda-Cash brokerage debacle without delay. Some 100 billion forints (EUR 329m) has gone missing from the firm.
The Socialist Party’s deputy leader Csaba Toth said the government and the central bank should stop trying to pass on the blame for the suspected embezzlement and offer an apology and full compensation to clients instead.
The case is “the country’s largest banking and brokerage scandal,” he told a press conference on Monday. It damages many private individuals and civil organisations, as well as more than 80 local councils and thousands of small businesses.
He said the government had communicated that the responsible party must be found. “But the truth is that it is solely responsible,” Toth said, adding that over the past five years the financial watchdog and the central bank had ample opportunity to prevent the Buda-Cash scandal.
The opposition LMP party said central bank governor Gyorgy Matolcsy should resign over the scandal and financial regulations should be tightened. Erzsebet Schmuck, a party lawmaker, told a press conference on Monday that the central bank and the government should compensate clients within the confines of the law. They should also enact legislation which would prevent anyone from “playing the stock market” with the funds of small investors.
Schmuck criticised the government for failing to create an adequate regulator when merging the financial regulator PSZAF into central bank in 2013, and noted that the central bank still lacks a supervisory body fit to catch such shortcomings.
The government is extending fast aid of 245 million forints to 67 local councils affected by the Buda-Cash case, Andras Tallai, the state secretary at the economy ministry, said in parliament.
Tallai said the local councils will be helped so their day-to-day operations are not put at risk and they can make social service payments as necessary.
He said the government estimated that about 150,000 private individuals, more than 80 local councils and thousands of businesses are affected.
An investigation of an unidentified perpetrator suspected of embezzling funds has been launched, the lawyer of Buda-Cash’s chief executive said at the weekend. The brokerage’s management has not fled the country and are ready to cooperate with the authorities, he said.
The National Bank of Hungary withdrew the Buda-Cash’s licence last week after reports of suspected criminal activity at the firm. The NBH also put a limit on withdrawals by members of the DRB Bank group, which has ownership ties to Buda-Cash.