Hungarian names appear in Paradise Papers

Last year, the Panama Papers shook the world by revealing complex financial schemes involving offshore companies and high-ranking politicians. The Paradise Papers is no less a gigantic source of information, amounting to 13.4 million files.

The leaks were obtained by German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ) and a network of more than 380 journalists in 67 countries. International media outlets that have participated in processing the information include the BBC, The New York Times and The Guardian. From Hungary, investigative journalism center Direkt36 alone participated in the project.

The new files come from two offshore services firms, Bermuda-based Appleby and Singapore-based Asiaciti Trust, as well as from 19 corporate registries in jurisdictions known as part of the global shadow economy. According to Direkt36, 560 Hungarian individuals have been identified in Maltese records, with "one of the most remarkable" being István Nagy, Hungaryʼs ambassador to Switzerland.

According to the documents, Nagy shows links to the Thyssen-Bornemisza family, the heirs of a wealthy and influential German-Hungarian dynasty. The family’s wealth has been managed by several companies, including Fragonard Limited, a firm registered in the British Virgin Islands. According to the files, Nagy is one of the directors of this company. His name appeared in documents concerning a 2008 deal, when Fragonard created a trust with the assistance of Appleby Trust Cayman Ltd. At that time, Nagy had been Hungary’s honorary consul in Geneva, Switzerland, for seven years, having been appointed under the first government of Hungarian Prime Minister Viktor Orbán. Nagy did not respond to Direkt36’s questions sent to his office.

Appleby was also the company that was contacted in 2014 by OTP Bank and MKB Bank for legal advice regarding a project on Seychelles, not detailed in the leaked files. OTP and MKB granted loans to firms related to wealthy Hungarian businessman Sándor Demján, Direkt36 reported. According to information available on one of the companies led by Demján, there is a luxury Seychelles resort project under way in the companyʼs portfolio.

Former Hollywood producer Andrew Vajna, now a media owner and Hungarian government commissioner in charge of the country’s movie industry, appears in the company registry of Aruba, a Caribbean Island belonging to the Dutch Kingdom. Vajna appeared as a supervisory director in two Aruba companies, Twinfalls Corporation and Twinfalls Corporation II, both liquidated in 2004. In Twinfalls Corporation, Vajna’s long-time business partner, Mario Kassar, also appeared as a director. They formerly co-owned Carolco, the producer of their most successful movies which went bankrupt in 1996. The press office of Vajna responded to Direkt36ʼs inquiries with a brief statement, noting that the now-defunct companies belonged to Carolco Pictures Inc.

The documents also reveal details about the business operations of George Soros, the Hungarian-born U.S. billionaire and philanthropist who is the target of an aggressive ongoing propaganda campaign run by the Hungarian government, which claims he is behind a pro-immigration plan in the EU.

According to the ICIJ, private equity funds controlled by Soros use Appleby to help manage a web of offshore entities, including an investment in one company engaged in reinsurance. Direkt36 said Soros declined to comment when ICIJ approached his office, while also noting that Soros’ charitable organization, the Open Society Foundations, is a donor to both Direkt36 and the ICIJ.

See the full summary compiled by Direkt36 here.