Hungarian board member of Russian spy bank speaks up on US sanctions

Update 17.04. 20:00: The original title of our article was: "Hungary is currently an ally of Russia – Hungarian board member of Russian spy bank".The title was based on a misunderstanding of a sentence by the speaker, Imre Boros. In the sentence, Boros was saying that Hungary is an ally of the United States, but this could also be understood as an ally of Russia.

After the publication of our article, word began to spread that we had misunderstood the sentence. On Monday, we reached Boros, who confirmed that we had misunderstood his sentence, in which he was actually referring to Hungary as an ally of the United States, not an ally of Russia. You can read our article on this here.

On Wednesday evening, economist Imre Boros, a minister in the first Orbán government, was originally supposed to be asked about the high inflation figures on pro-government Hír TV. Contrary to the optimistic government voices, the figures are seen as unexpectedly and uncomfortably high by economists. In the end, the program mainly focused on the news from Wednesday afternoon that the United States had placed the heavily Russian-owned International Investment Bank (IIB) based in Budapest, and several of its executives, including Hungarian citizen Imre Laszlóczki, on a sanctions list.

Moreover, Imre Boros was able to speak on this issue not only as a simple economist, but as a member of the IIB's Executive Board. And as such, he made two astonishing statements in quick succession when he first spoke about the institution, which is often referred to in political discourse as the Russian spy bank.

One was:

If you want to hit Russia, you hit one of its allies, Hungary

And the other was this:

As you know, for quite some time, we have been the number one shareholder in this bank.

Let's start with the second one, which seems to be a factual question. Direkt36, the investigative journalism centre which collaborates closely with Telex, wrote on 13 March: "Russia's stake in the bank has even fallen slightly (from 47.21% to 45.44%), which meant an automatic increase for all the other shareholders remaining in the bank. The biggest increase (8 percentage points) was achieved by Hungary, which now holds 25.27% of IIB shares."

The proportions may have changed somewhat since the Bulgarians left the bank – leaving Hungary as the only EU member involved – but it is hard to believe that they have changed to the extent that Hungary has become the bank's largest shareholder. But even when the presenter asked Boros what this meant, he reiterated his claim:

It means that Hungary's share is bigger than Russia's.

If this is indeed the case, it must have happened within the last month, which would be a bold decision from the Hungarian government at a time when the bank, according to a leaked internal letter, has used up all its liquidity reserves, and since losing access to its funds frozen by Western sanctions, "is at risk of insolvency or will be forced to restructure its bonds as early as May 2023".

Of course, Boros' first statement is also remarkable in the sense that so far only pro-Fidesz pundits have talked about the Russian-Hungarian friendship that transcends the current war. The Russian-Hungarian alliance has never been so openly acknowledged by a public figure close to the government (a former minister of Orbán, and an economist representing the country on the board of an international organisation).

When the subject of too close Russian-Hungarian relations was raised, Boros did not deny it either, but said: what does Pressman have to do with it? And besides, the "relationship was not built up now, to annoy them, but over the past four or five decades". Which, of course, was not a relationship that was dear to the hearts of the Hungarians, but it was the result of the fact that "they were kind enough to hand this region to the Soviet Union after the Second World War, and I would remind the Ambassador of that".

Boros was also asked about how Laszlóczki and the bank were affected by the sanctions list. "I haven't spoken to him, I don't know exactly what this sanction will mean, they probably won't be allowed to travel to the US," he said, adding that he did not expect any other restrictions. He also said that the IIB is an international organisation "subject to a special legal regime, a kind of diplomatic immunity" and although the West treats it as if it were a 100 per cent Russian institution, it has never had a Russian ownership of more than 50 per cent.

"If the Russian intelligence services are in a position where they need to spy through a bank in Budapest, then they are quite underestimated," he said, referring to the habit of referring to IIB as a spy bank.

And what is their market environment like now? As such, the bank is under quite a lot of market pressure because of the way it has been treated by "the representatives of the West, dominated by the private financial system", Boros said. But "its business is structured in a way which will enable it to meet its last payments for a long time to come. And one can only hope that the political winds will change, that there will be a consolidation when the war is over," he said.