Part I — Situation overview

Early on Wednesday morning, 21 October, the Central Chief Prosecutor’s Investigation Office (KNYF) took into custody György Matolcsy, governor of the Magyar Nemzeti Bank (MNB, the central bank) between 2013 and 2025. The suspicion is economic fraud causing particularly substantial financial loss and use of a forged private document (Index, ATV). The then representative of the private equity fund and the lawyer who took part in the transaction were taken into custody with him. The KNYF moved for the pre-trial detention of all three suspects; the suspects did not make statements. On the basis of international arrest warrants, the police are searching for Ádám Matolcsy, the former governor’s son, and György Stofa (Telex, 24.hu). According to press reports, the investigating judge will decide on pre-trial detention on Friday. According to defence counsel Pál Bátki, the coercive measure is unjustified, and they have to process a five-page notice of suspicion containing a great deal of data (ATV, Portfolio).

From the sprawling MNB affair, the prosecution service has singled out one well-documented thread. In 2014, the MNB established the Pallas Athéné foundations and gave them more than 266 billion forints from the central bank’s exchange-rate gains. In 2019, the foundations merged into the Pallas Athéné Domus Meriti (PADME) Foundation. On 28 February 2025, Matolcsy’s penultimate working day as governor, the Optima group, which managed the foundation’s assets, used a securities lending agreement to hand the ordinary shares of its fund management company, which managed assets of nearly 200 billion forints, to the Közép-Európai III. Magántőkealap (Central European III Private Equity Fund). A securities loan is a transaction in which a share is transferred for a set period and is then returned. According to the KNYF, the contract was a sham: the real aim was for control over the assets to remain within the Matolcsy family’s sphere of influence even after the mandate expired (Index, Telex). The central bank led by Mihály Varga, who took office on 4 March 2025, reversed the transaction within two weeks, and the foundation’s new board of trustees filed a criminal complaint in April (24.hu, Index). MIAK has previously written about the 92-billion freeze, the benchmark for the MNB committee of inquiry and the publicity of central bank contracts. This analysis does not repeat them.

MIAK’s reading: the court decides on personal liability, and György Matolcsy is entitled to the presumption of innocence until a final judgment. The institutional lesson, however, is already visible and does not depend on the judgment. The suspicion concerns a transaction concluded one day before the known end point of the term of office, which was stopped only by the swift intervention of the successor. The system had no brake that would, of its own accord, have prevented control over assets built from public money from being handed over in the last days of the mandate.

Part II — Grounding in the literature

Three sources provide a framework for interpreting the case. In her book Corruption and Government, Susan Rose-Ackerman (professor of law and political science at Yale University, one of the leading researchers of the political economy of corruption) describes how a power-holder who fears losing power seeks immediate gain instead of future returns. This effect is amplified both by uncertainty about the term of office and by its approaching end. The last days of a mandate are therefore structurally risky periods. In his memoir From Third World to First, Lee Kuan Yew (Singapore’s first prime minister, the architect of Singapore’s anti-corruption system) describes how anti-corruption action became credible because it extended to everyone without exception, ministers included, and because the law treated unexplained wealth as evidence. He also describes how the fate of a suspect who fled abroad did not halt the proceedings. Act XC of 2017 on Criminal Procedure (Be.) provides today’s Hungarian framework. Pre-trial detention may be ordered only if its aim cannot be achieved in any other way. Sequestration can secure not only confiscation but also the injured party’s civil-law claim. The detailed treatment of the literature — author by author, with a paraphrase of the argument — is in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable steps. None of them concerns the outcome of the criminal case; that is for the court to decide. The first is about preventing future transactions, the second about active action by the injured central bank foundation, and the third about the assets of suspects residing abroad.

3.1 An end-of-mandate transaction freeze at asset managers founded from public money (legislative amendment by 31 December 2026)

The end of the central bank governor’s term of office is known years in advance, so rules for the last months can be laid down in advance. MIAK’s proposal concerns central bank foundations and other foundations established from public money, as well as the asset managers they control. For these, separate approval should be required for certain transactions in the 90 days before the expiry of the mandate of the leader or of the head of the founding body, and until the successor takes office. These include the transfer of ownership control, securities lending, option or repurchase obligations and any contract affecting lasting control over the assets. Such transactions should require the prior, reasoned approval of the supervisory board, notification of the State Audit Office (ÁSZ) and a 15-day waiting period before execution. For such organisations, the court of registration should register a change of ownership only with confirmation from the founding body. Under Article 39(2) of the Fundamental Law, every organisation managing public funds is obliged to account publicly, and Article 38(4) requires a transparent ownership structure in the use of national assets. The proposal extends this standard in time as well. According to Rose-Ackerman’s thesis (see 6.4.1), the temptation of immediate gain grows towards the end of the term of office, so the brake is needed precisely when internal control is at its weakest. The proposal builds on programme points A6 (checks and balances) and G19 (radical transparency).

3.2 Active action by the injured foundation: a civil-law claim and a six-monthly asset-recovery report (claim within 30 days, first report by 31 January 2027)

Criminal proceedings concern the liability of the suspects; recovery of the loss does not follow from them automatically. Under the Be., sequestration may also be ordered to secure a civil-law claim (see 6.4.3). For this, however, the injured party must file a claim. MIAK proposes that the PADME Foundation and the MNB publicly announce within 30 days that they are enforcing a civil-law claim in the criminal proceedings, and request the sequestration of appropriate assets of the suspects. According to Telex, a bank stake of about 6.2 per cent linked to the circle of suspects was transferred to Ádám Matolcsy’s name in mid-2026. It is for the prosecution service to decide which assets to sequester; on a motion by the injured party, however, it is obliged to decide on the matter. The second element is the publicity of asset recovery. The foundation should publish a report on the state of the portfolio every six months. It should include the value of assets sold and of assets earmarked for sale (among them the stake in the Polish GTC), the status of the Swiss Ultima investment, and the amounts recovered and those still disputed. It should also contain a value-preservation indicator: the ratio of preserved and recovered value to the founding assets of 266.5 billion forints. The proposed recovery-rate benchmark of the National Office for Asset Recovery and Asset Protection (NVVH) would appear here on the injured party’s side. The proposal builds on programme points A1 (public-money dashboard) and G22 (financial stability monitoring).

3.3 The assets as well as the person: tracing assets abroad and pursuing the domestic thread (ongoing, first aggregate update within 90 days)

According to press reports, one of the wanted suspects has for years been building businesses and buying property in the United Arab Emirates (UAE) (24.hu, HVG). The Be. allows the prosecution service to suspend the proceedings for up to six months if the suspect is residing abroad. MIAK would consider it justified that this should not bring the whole case to a standstill. If the evidence allows, the cases of the suspects available in Hungary should move forward. On the foreign thread, alongside the request for the extradition of the person, a request for asset tracing and asset freezing should be launched in parallel. Its outcome does not depend on the Hungarian authorities. The UAE’s practice on extradition and legal assistance varies by country and by case, so a request targeting assets can bring results even if extradition drags on. The prosecution service and the competent government bodies should provide aggregate information within 90 days and quarterly thereafter: how many foreign requests are pending, in how many countries, and what value of assets has been frozen abroad. They should not disclose concrete investigative data. According to Lee Kuan Yew’s Singapore experience (see 6.4.2), action gains credibility from the system making no exceptions, and from flight not releasing anyone from liability. The proposal transfers the asset-recovery element of programme point A10 (independent anti-corruption investigation office) to today’s institutional system.

A common principle links the three proposals: the benchmark of accountability should be the rules and the recovery of losses, not the spectacular moment. The end-of-mandate brake narrows future temptation, the injured party’s action serves the recovery of the loss, and tracing assets abroad prevents crossing a border from counting as an acquittal. Rose-Ackerman reaches the same point from the incentives at the end of a term of office, Lee Kuan Yew from application without exception, and the Be. from procedural guarantees.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Protection of public money The end-of-mandate transaction freeze closes in advance the time window in which the 28 February transaction came about If the range of transactions is too broad, ordinary asset management also slows down during a change of leadership
Asset recovery The civil-law claim and sequestration increase the chance of the loss actually being recovered The public report weakens the negotiating position if it discloses sale prices prematurely
Criminal proceedings Pursuing the domestic thread reduces the risk of delay Splitting the evidence may weaken the indictment if the threads are closely interlinked
International cooperation A request targeting assets can bring results even if extradition drags on Foreign proceedings can take years, and their outcome does not depend on the Hungarian authorities
Rule-of-law benchmark The institutional proposals do not depend on the judgment, so they remain valid even in the event of an acquittal Public debate narrows to the individual case, and rule-making drops off the agenda

The most important dilemma lies between asset recovery and publicity. According to Telex, the central bank’s new leadership and the asset manager have been trying for a year and a half to reduce the losses on the foundation’s assets, and the sale of one of the large investments is under way. The paper also warns that the arrests may deter investors. A public report that also discloses planned sale prices favours buyers. The proposal therefore asks for the actual value of closed transactions and the aggregate value-preservation indicator, not the details of ongoing negotiations.

The second risk is the calibration of the transaction freeze. If it covers every contract, the period of leadership change may be paralysing. If it is too narrow, it is easy to circumvent. The proposal therefore targets the type of transaction rather than its amount: the transfer of control or lasting disposal over the assets. The 28 February contract was exactly of this kind. The third risk is political: if the case becomes part of the government’s communication, any outcome of the later judicial decision may cause a loss of institutional credibility. MIAK’s analysis of 18 September already made a proposal on the government’s discipline in public statements; this case is its first major test.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK suggests following these key performance indicators (KPIs):

  • Transaction-freeze rule: submission of the legislative amendment containing the end-of-mandate transaction freeze by 30 November 2026, and its adoption by 31 December 2026. It is also worth following how many transactions are notified during the freeze period.

  • Civil-law claim: public announcement by the PADME Foundation and the MNB of the enforcement of the claim within 30 days, i.e. by 21 November 2026.

  • Asset-recovery report: the first six-monthly report by 31 January 2027, including the value-preservation indicator. The suggested direction: the indicator should not decrease from year to year.

  • Foreign requests: the first aggregate update by 20 January 2027, quarterly thereafter. It is worth following whether assets are frozen abroad within 12 months.

5.2 Summary

MIAK expresses no view on the guilt of the suspects: that is for the court to decide, and on Friday the judge will also rule on pre-trial detention. MIAK asks the National Assembly to close the end-of-mandate loophole by the end of the year. It asks the central bank and the foundation to actively claim back the loss as the injured party and to make asset recovery measurable. It asks the prosecution service and the government to follow the assets as well in the case of suspects who have left the country.

The proposals build on two of MIAK’s foundational values. Transparency is involved because the 28 February transaction might never have come to light without the public entry in the company register, and the result of asset recovery is still not visible today. Accountability is involved because holding people to account is complete only if the loss is also recovered. For this, the court has to decide on the suspects, and the legislature on the next end of a mandate.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

In the liberal-left band, Telex approached from two directions. One of its articles presented the KNYF statement and the international arrest warrant factually. The other (Matolcsyék eddig nem segítették az elherdált MNB-vagyon visszaszerzését. Talán majd most) deliberately stepped outside the criminal-law thread: it examined whether holding people to account helps or hinders asset recovery. 444.hu, building on its own fact-finding from April 2025, framed the transaction as “the world’s lamest fraud”, while HVG focused on the sentencing range and on whether the suspect residing abroad can be extradited. The detailed analyses of both outlets are subscriber content (the articles were not publicly downloadable). Népszava’s material was not available on that day.

In the mainstream band, 24.hu’s explainer described the mechanics of the transaction, referring to its own 2025 investigation. It also quoted the former CEO’s explanation at the time, according to which only “structuring within its own portfolio” had taken place. Index published the KNYF statement verbatim and in detail. It separately highlighted the presumption of innocence and Matolcsy’s earlier claim that the foundation’s assets are fully intact. ATV put the defence counsel’s statement at the centre.

In the economic band, Portfolio published a long historical overview (Matolcsy György bukása: a közpénz elveszített jellege és „a legnagyobb bankrablás"). It traced the case from the 2016 debate over “public money until when” through the Constitutional Court’s decision and the ÁSZ’s 2025 report to the taking into custody. It stressed that the loss in value of an investment is not in itself a criminal offence; the criminal-law question is the justification of the decisions and intent.

In the pro-government conservative band, Magyar Nemzet published a procedural report on the questioning and the motion for pre-trial detention (the article was not publicly downloadable). It also published Fidesz’s reaction: according to the party, it is a fundamental interest that every question relating to the foundations’ management be clarified, while everyone is entitled to the presumption of innocence and a fair trial. According to Portfolio, the statement was signed by former Prime Minister Viktor Orbán and the party’s press chief, and called for an impartial investigation free from political pressure. Mandiner’s material was not available on that day. Common to the whole spectrum is that the presumption of innocence was emphasised by the pro-government and the opposition side alike. The question of asset recovery, however, was discussed almost only by Telex.

6.2 Facts and data

Fact Value Source
Establishment of the foundations 2014, from the central bank’s exchange-rate gains KNYF statement (Index, Telex)
Public money given to the foundations more than 266 billion forints (266.5 billion according to Matolcsy) KNYF statement; Portfolio
Merger of the foundations 2019, PADME Foundation KNYF statement
Date of the disputed transaction 28 February 2025, Matolcsy’s penultimate working day as governor KNYF statement
Assets managed by the fund manager concerned market value of nearly 200 billion forints KNYF statement
Lower threshold of particularly substantial financial loss 500 million forints; according to the KNYF the loss significantly exceeds this KNYF statement
Sentencing range in this category imprisonment from five to ten years Index
Reversal of the transaction mid-March 2025, under the new central bank leadership Index, 24.hu
Total assets managed by the group nearly 500 billion forints, of which about 407 billion is public money according to the ÁSZ Portfolio (based on the ÁSZ report)
Premium on the purchase price of the GTC stake about 31 per cent over the stock-market price, an excess of nearly 60 billion forints Portfolio (ÁSZ, 2025)
Impairment not recognised up to 150 billion forints in 2024 Portfolio (ÁSZ)
Purchase and sale price of the Ultima shares 105 Swiss francs and 60 Swiss francs per share, respectively Telex
Parliamentary committee of inquiry hearing 5 November 2026, György Matolcsy and Mihály Varga summoned Portfolio (statement by the committee chair)

In connection with the 2016 legislative amendment, the Constitutional Court ruled that the organisations established by the MNB manage public money, and that assets placed in a foundation do not lose their character as public money (Portfolio). Under Article 39(2) of the Fundamental Law, every organisation managing public funds is obliged to account publicly for its management of public funds. The press sources differ on one point: in describing the notice of suspicion, the defence counsel speaks of “substantial” financial loss, while the KNYF statement speaks of “particularly substantial” loss. The table follows the official statement.

6.3 Policy dimensions

  • Transparency and anti-corruption policy (programme points) — publicity of asset managers founded from public money, the end-of-mandate transaction freeze and the measurability of asset recovery (A1, A6, A10);
  • Justice (programme points) — pre-trial detention is decided by the independent court, not by the government or parliament; respect for the decision whatever its outcome (I4);
  • Economy (programme points) — transparency in the use of central bank profits and supervision of private equity funds and fund managers (G19, G22);
  • Public security and law enforcement (background material) — execution of the international search and foreign police and judicial cooperation.

6.4 Literature in detail

6.4.1 Susan Rose-Ackerman: Corruption and Government

Analysing the economic logic of kleptocratic rule, Rose-Ackerman concludes that a leader who fears for their power adjusts to immediate gain instead of future revenues. If a leader, fearing their fall, values future returns far less than private investors do, it may be rational for them to hand a public asset below market price to a party close to their family or circle. In another chapter she writes about the paradox of stability. Democracy works well if politicians fear elections, but not too much: both excessive security and excessive insecurity of tenure distort decisions. In the Hungarian case this means that the known end of the central bank governor’s mandate is itself a risk factor. In the last days of a leadership that operated for twelve years, across two terms, with broad discretionary powers, the temptation to retain control beyond the term of office is at its strongest. According to the suspicion, the 28 February transaction followed exactly this pattern. Proposal 3.1 therefore ties the brake to time, not to a person.

📖 Source: Susan Rose-Ackerman: Corruption and Government — Causes, Consequences, and Reform

6.4.2 Lee Kuan Yew: From Third World to First

In his memoir, Lee Kuan Yew describes how, under his leadership, Singapore’s anti-corruption agency concentrated on the big profiteers at the upper levels. After the 1960 amendment of the law, the court could treat it as evidence if the accused possessed wealth that could not be explained by their income. Investigators could also examine the bank accounts of the suspect’s relatives. According to Lee, high moral standards alone are not enough; what is decisive is that leaders act against every wrongdoer, without exception. In one case he describes, a trade union leader defended himself while free on bail, then fled abroad, and his guarantors lost their deposit. According to Lee, the fugitive’s fate brought no relief. Two lessons follow for the Hungarian case. One is that credibility depends on consistency: the same standard applies to a former central bank governor as to any other suspect. The other is that leaving the country cannot close the case, which is why proposal 3.3 treats tracking the assets as equal in importance to the extradition of the person.

📖 Source: Lee Kuan Yew: From Third World to First — The Singapore Story: 1965–2000

6.4.3 National Assembly: Act XC of 2017 on Criminal Procedure

The basic principle of the Be.: “The burden of proving the charge lies with the prosecutor.” (Section 7(1)). Under Section 276, pre-trial detention and other coercive measures affecting personal liberty may be ordered only if “this is necessary to achieve the aim of the coercive measure, and the aim to be achieved cannot be ensured in any other way”. Among the grounds, the Act names the risk of flight and the endangering of evidence. Before indictment, the court decides on the motion of the prosecution service. Friday’s decision is therefore neither the prosecution service’s nor the government’s. Under Section 324, sequestration suspends the right of disposal “in order to secure confiscation of property or a civil-law claim”. This gives the injured foundation a tool to secure the loss if it files its claim (proposal 3.2). Under Section 395, the prosecution service may suspend the proceedings for up to six months if the suspect is residing abroad. This explains why, in proposal 3.3, it matters that the thread available at home should not stall. The source is the text of the Act as promulgated; the text in force may differ owing to later amendments.

📖 Source: National Assembly: Act XC of 2017 on Criminal Procedure (Be.)

6.5 International comparison

Restricting end-of-mandate decisions. In the United States, following the practice of rules adopted at the end of an administration’s term, Congress may review in an expedited procedure federal rules issued in the last months of the term of office. In the United Kingdom, guidance for civil servants for the pre-election period restricts new, long-term commitments. Neither is a central bank rule, but both rest on the same risk: the end of a term of office requires special control.

Recovering assets from abroad. In the case of 1MDB, the Malaysian state investment fund, asset forfeiture proceedings by the US Department of Justice returned more than one billion dollars to Malaysia. This showed that proceedings targeting assets can be successful independently of holding individuals to account. The extradition practice of the United Arab Emirates is mixed. In 2019, for example, a suspect wanted by the Dutch authorities was handed over to the Netherlands within days. By contrast, the extradition of South Africa’s Gupta brothers was refused in 2023 on procedural grounds. Proposal 3.3 therefore treats the request targeting assets as equal in importance.

The Singapore model. According to Lee Kuan Yew’s account (see 6.4.2), the strength of the Singapore agency lay in the unexplained-wealth evidentiary rule and in application without exception. Programme point A10 follows this model, supplemented with the Hungarian guarantees of judicial control.

Transparency and anti-corruption policy

  • A1 — Public-money dashboard
  • A6 — Strengthening checks and balances
  • A10 — Independent Anti-Corruption Investigation Office (CPIB model)

Economy

  • G19 — Radical transparency in economic decision-making
  • G22 — Financial stability monitoring and shadow-banking regulation

Justice

  • I4 — Protecting judicial independence

Proposed new programme point: An end-of-mandate transaction freeze at asset managers founded from public money — for the Transparency and anti-corruption policy area.

6.7 List of sources

Press sources (MIAK press monitor, 22 October 2026 — topic 1):

Knowledge-base references (reference books):

  • 📖 Susan Rose-Ackerman: Corruption and Government — Causes, Consequences, and Reform
  • 📖 Lee Kuan Yew: From Third World to First — The Singapore Story: 1965–2000
  • 📖 National Assembly: Act XC of 2017 on Criminal Procedure (Be.)

MIAK internal materials:

  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point IDs: A1, A6, A10)
  • MIAK policy area: Economy (programme points; programme point IDs: G19, G22)
  • MIAK policy area: Justice (programme points; programme point ID: I4)
  • MIAK policy area: Public security and law enforcement (background material)
  • MIAK press monitor, 22 October 2026 — topic 1, score: 95/100

Supplementary public data sources (legislation):

  • Fundamental Law of Hungary — Article 38(4) and Article 39(2)
  • Act XC of 2017 on Criminal Procedure — Sections 7, 276, 278, 324 and 395 (text as promulgated)

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