Changing fortunes – oligarch goes from teammate to character assassination target

Banker/media mogul Zoltan Speder is rapidly seeing his world turning upside down. Having been a trusted associate of the reigning power up until very recently, he is now seeing his companies as well as his person bombarded by attacks from all directions. Atlatszo.hu explored the conditions in the finance and media markets that led to these changes.

Zoltan Speder is a highly influential oligarch, owner of FHB Bank, an increasingly significant player on the Hungarian banking market, not to mention the CEMP group, which publishes index.hu, currently the country’s most influential news and infotainment website. While he rose to where he is thanks to his amicable relations with the governing power and Prime Minister Viktor Orban, times have changed and he now finds himself the target of a coordinated character assassination attempt that is meant to make him personally, as well as his business interests wither.

Oligarchs falling out of grace is nothing new, the case of Lajos Simicska, which Atlatszo.hu covered extensively in the past being the best example, not to mention those loyal to him who are now looking for other options.

Speder has a colorful past, he has direct ties to the governing Fidesz party and has remained loyal to Orban. He was meant to be a balancing factor against Sandor Csanyi, Hungary’s wealthiest man and head of the OTP group, the finance firm that is by far the market leader and has over the decades grown into a multinational company.

As far as the events of the past years can be reconstructed, Speder promised Orban that he would establish a counterbalance to Csanyi’s strength in the banking industry, seeing that Orban doesn’t appreciate anybody getting too much influence. The main channel was the integration of the savings reserves, small membership-based finance companies that provide loans and manage bank accounts, but operate under different business models than commercial banks. Accordingly, these are considered the “banks of the countryside”, since each on its own serves a limited and usually less affluent client base in smaller townships that are consequently unappealing to commercial finance firms. However, if all of these firms are parts of a chain, they become one of the biggest financial conglomerates of the country.

The integration happened, FHB Bank joined and became a major factor in the group.

However, Csanyi, who has publicly stayed quiet in the entire affair has apparently managed to activate his government contacts and managed to reaffirm his favorable relations with the other oligarchs that are still in Orban’s favor. As such, even though the entire counterpoint of OTP idea came from the prime minister, it failed, Csanyi maintained his considerable influence.

Speder’s FHB also made moves that irradiated Orban. The bank’s management made attempts to reduce the influence of the government, which has an ownership stake in FHB, which caused a backlash. The events that took place at the start of the year were eventually resolved, but another genial meeting was called for mid-June where reportedly the Speder bank once again was looking to backtrack on the earlier deal with Orban. He was also strongly attacked by bankers saying his FHB used the integration in the savings community to demand financing from the other members, since it could inly continue operation through new capital injections.

Shortly after, Orban himself made a statement, the market regulator issued a fine and police investigators stormed the FHB sites looking for evidence of misconduct. As our sources close to the government told us, the main reason that the anti-Speder campaign kicked off was to avoid a bank failure, which would have additional consequences. There is also some angst seeing that the state gave financing to FHB indirectly in the past, which it could not properly recover.

There is another field in this story that should be considered, namely the media market. Through owning the CEMP group, Speder is also the owner of index.hu a news and entertainment portal, the market leader in its field. Recently, Orban’s people have made extensive efforts to reshuffle the media market, make the public messages more favorable to the political rule. Besides establishing new portals and buying out established newspapers and broadcasters, there was also speculation that index.hu should be added to the fold to change the medium’s currently anti-establishment tone to a more favorable one.

Original article in Hungarian.