Shocking: thousands of billions of forints loss in public assets

Last year, the Hungarian National Asset Management (MNV) Zrt. accumulated a loss of HUF 486 billion. In the last three years, public asset management has shown a total loss of more than a thousand billion forints (more than EUR 2.5 billion).

Huge losses in public assets

The record deficit is mainly due to the free transfer of public assets to various foundations. The balance sheet of state asset management last year showed an unprecedented deficit of HUF 486 billion (EUR 1.22 billion), reports Népszava, referring to the recently published balance sheet report of MNV Zrt. The significant shortfall was mainly caused by free asset transfers, writes napi.hu.

Over the past three years (2019-2021), MNV’s asset management activities have generated a total of HUF 1,060 billion (EUR 2.67 billion) in losses and asset losses. Before 2019, the result of public asset management was still in profit overall.

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Asset management result at MNV:

Year	Results (bn HUF)
2018	95.4
2019	-304.6
2020	-269,6
2021	-489.3

Source: MNV reports

Free asset transfers have boomed in recent years, which is one of the reasons for the huge losses. The government has handed over the most valuable assets of the Hungarian state, which can be sold and moved at any time, to a new kind of “public interest trusts”, the Népszava article notes. What is notable is that the board of trustees of these foundations includes a large number of Fidesz politicians.

In addition to real estate, about 24 percent of Mol Plc. and a similar amount of shares in Richter Plc. were privately acquired in a free-of-charge asset transfer. Among the beneficiaries is the Matthias Corvinus Collegium, which is headed by Balázs Orbán, the political director of the Prime Minister.

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State assets increased despite huge loss?

Despite last year’s HUF 486 billion loss, the value of state assets increased, at least on paper, due to the state’s road network developments. According to the MNV report, the value of the assets entrusted to them amounted to HUF 11 407 billion (EUR 28.72 billion) at the end of 2021. This is an increase of HUF 745 billion (EUR 1.87 billion) compared to the previous year, despite the loss-making asset management. The increase, however, is almost exclusively due to new expressway and road developments under the management of Magyar Közút, writes Népszava.

Népszava underscores that out of the 11 thousand billion in assets shown, a good 9 thousand billion are managed by other state bodies, and it is practically impossible to check whether the value of state assets shown on paper corresponds to reality. According to Ernst & Young, auditor of MNV, the value of assets reported by external asset managers does not correspond in many cases with the data in the Treasury’s asset register.