Page 5 - bne IntelliNews monthly magazine May 2024

bne May 2024 Companies & Markets I 5
of the previous CEO Daniel Obajtek, a political nominee of the previous government of Law and Justice (PiS).
Prime Minister Donald Tusk hinted at trouble brewing at Orlen because of its Swiss subsidiary in March.
“There are justified concerns that in connection with the activities of this company, Poland will face very serious problems,” Tusk told a press conference at the time.
The scandal is now prompting questions about internal procedures for verifying business partners at Orlen, as it
“was already clear in late 2023 that a contract had been signed with a random supplier who turned out to be
a fraudster”, Poland's business and industry news website wnp.pl wrote on April 12.
Another issue is “why such important information was only published in April”, it added. Orlen’s consolidated annual report for 2023 is scheduled for publication on April 25.
The company’s share price fell 2.17% to PLN68.2 on the Warsaw Stock Exchange on April 12.
Orban’s son-in-law and Russian oligarch reportedly attempted to buy stakes in Spar
Tamas Csonka in Budapest
ARussian oligarch and Hungarian premier Viktor Orban’s son-in-law approached Spar separately with bids backed by the government to buy stakes in the Dutch-based retail chain's Hungarian operations over the past year, Vsquare reported on April 4.
The bids were allegedly part of a campaign by the government to force the retailer to allow businessmen close to the semi- authoritarian Orban regime to enter the company. The Hungarian government is on record for pushing for more domestic ownership of key strategic sectors and has allegedly used tactics close to extortion to achieve this aim, a process that has enriched businessmen close to the ruling Fidesz party.
The retailer filed a complaint with the EU about the windfall tax in Hungary introduced in 2022, accusing the Hungarian government of breaking EU law, and called on Brussels to intervene to mitigate the impacts. The government slapped the largest retailers in Hungary with a 4.1% revenue-based tax and introduced a string of unorthodox measures, such as price caps and mandatory discounts.
"We are the second-largest food retailer in Hungary with over 600 stores, but these measures make it impossible to operate profitably in Hungary", Spar CEO Hans Reisch told German and Austrian media a few days later, adding that government measures have cost the retailer €120mn.
Spar paid €76mn in special tax last year, which is expected to rise to €92mn in 2024, pushing the company deeply in the red.
Reisch also said that Orban asked the company to let one of his relatives become a shareholder and announced that Spar is withdrawing assets from Hungary for fear of expropriation as part of a corporate restructuring.
The Austrian CEO openly spoke about the Orban government’s harassment and extortion, adding that the prime minister made the reduction of the windfall tax conditional to granting ownership to his relative.
Vsquare learned that more than a year ago, the Rahimkulovs, one of the richest families in Hungary, headed by oligarch Megdet Rahimkulov, made a bid for Spar, but got rejected. The Russian billionaire had a key role in drawing up a gas trading agreement between Hungary and Russia in 1996 and acted as an intermediary between MOL and Gazprom. He was also the head of a local bank owned by Gazprom at that time.
The site learned from a Hungarian business source that Istvan Tiborcz, Viktor Orban’s son-in-law, was the unnamed Orban relative mentioned by the Spar CEO in connection with the takeover attempt.
Orban's son-in-law Istvan Tiborcz. / bne IntelliNews
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