Hungarian Government to Review 4iG State Contracts, Triggering Sharp Share Decline
Government Actions and Market Impact
Announcement of Contract Review
BUDAPEST, Aug 17 (Reuters) - Hungarian Prime Minister Peter Magyar said on Monday his government will review contracts signed between the state and Hungarian IT and telecoms company 4iG while the former government of Viktor Orban was in power.
Immediate Market Reaction
The news sent 4iG's shares sharply lower, down more than 11% in late afternoon trade and on course for their biggest one-day loss since Magyar's election in April.
4iG did not immediately respond to a request for comment.
Details of the Review
"The government has ordered a review of all their contracts with the state," Magyar said in a post on Facebook, adding that the company had acquired assets of strategic importance under Orban's government.
4iG's Business Interests
4iG has interests in the telecoms sector, IT, defense and the space industry.
Specific Contracts Under Scrutiny
Magyar said, among other inquiries, there was a review underway of a framework deal worth more than 1.3 trillion forints ($4.2 billion) signed weeks before the April elections between 4iG and the defense ministry.
Government's Next Steps
He said the government would make the findings of its reviews public and, in case of any irregularities, it would turn the information over to the relevant authorities.
Background: 4iG and Political Influence
Oligarchs close to Orban and his government expanded their influence in strategic sectors after he gained power in 2010.
($1 = 312.7700 forints)
(Reporting by Krisztina Than and Anita Komuves; Editing by David Holmes)