Published: November 24 2023
In a recent case, executives of the Hungarian airline Malév have been convicted for causing significant financial losses to the company. The court found the former Chairman of the Board of Directors and one of the former CEOs guilty of misappropriation of funds and money laundering.
The Malév-case
The Metropolitan Court of Budapest has reached a judgment of first instance in the Malév-case. The former chairman of the board of directors and one of the former CEOs were found guilty of continuous misappropriation of funds and money laundering. The case involved the defendants instructing the CEOs to conclude consultancy contracts with a company in which the chairman had an interest. The company subsequently received commission fees without providing any actual work. This resulted in a financial loss of over HUF 800 million to Malév, leading to the airline's bankruptcy in 2012.
Funds Transfer and Ownership
After the funds were transferred by Malév, the president and CEO who issued the false certificates transferred the money to companies of their own interest. Russian businessman Boris Abramovich served as the Chairman of the Board of Directors of Malév from March 2007, and the State Privatisation and Asset Management Corporation (Állami Privatizációs és Vagyonkezelő Rt., ÁPV) was the majority owner of Malév until 2007.
The Judgement
The Metropolitan Court sentenced the former chairman of the board of directors (as the instigator) and the former managing director (who issued false performance certificates) to 2 years’ imprisonment and a fine of HUF one million. The court found them guilty of continuous misappropriation of funds and money laundering causing particularly significant financial loss.
Conclusion
The conviction of the former executives of Malév highlights the consequences of financial misconduct within companies. This case serves as a reminder of the importance of transparency and ethical practices in corporate management.
Questions & Answers
What is the Malév-case? The Malév-case refers to a legal case involving the managers of the Hungarian airline Malév who caused significant financial losses to the company.
Who was found guilty in the Malév-case? The former chairman of the board of directors of Malév and one of its former CEOs were found guilty in the Malév-case.
What did the defendants do in the Malév-case? The former chairman of the board of directors instructed the company's two CEOs to conclude consultancy contracts with a company in which he had an interest. The defendants caused Malév to pay commission fees for these contracts without any actual work being done.
What was the financial loss caused by the defendants in the Malév-case? The defendants' actions resulted in a total financial loss of more than HUF 800 million (EUR 2.1 million) to the Hungarian airline Malév.
When did Malév go bankrupt? Malév went bankrupt in 2012.
What was the sentence given to the defendants in the Malév-case? The Metropolitan Court of Budapest sentenced both defendants to 2 years' imprisonment and a fine of HUF one million (EUR 2,633) for continuous misappropriation of funds and money laundering causing particularly significant financial loss.
