Government Orders Probe of 4iG Contracts with State

The government has ordered a comprehensive probe of 4iG's contracts with the state, Prime Minister Péter Magyar said in a social media post on Monday.

The prime minister stated that four ministries would be involved with the probe of 4iG, which he called the "mothership" of "NER" companies, using a Hungarian acronym referring to businesses that benefited from big state contracts under the former Fidesz-KDNP government.

He said 4iG had won state IT contracts "in the billions" in the 2010s, before "switching into a much higher gear" from 2022, with the issue of HUF 389 billion in bonds in the framework of a National Bank of Hungary (MNB) program and a more than HUF 400 billion capital raise in Antenna Hungaria after which 4iG acquired a majority stake in the telco.

In 2023, Péter Magyar added, Antenna Hungaria and the state of Hungary acquired Vodafone Magyarország in a deal worth HUF 660 billion, with the state-owned Hungarian Development Bank (MFB) providing the financing for 4iG's stake.

The prime minister also noted 4iG's acquisition of the state's majority stake in automotive industry company Rába and 4iG's subsequent transfer of a stake in the business to a foreign company.

He added that 4iG had been the general contractor for an "overpriced" program to supply seniors with remote medical alert bracelets.

"We're talking about several thousand billion forints of taxpayer money. The Hungarian people have a right to know what happened to their money," Péter Magyar said, adding that the results of the probe would be published.

If the probe raises any suspicion of graft, he stated reports would be filed with the relevant authorities. He warned against any efforts to strip assets from the group.

In reaction to the news, 4iG shares suffered a considerable loss in value at the Budapest Stock Exchange.