The Hungarian State Holding Company (MNV) commenced its operation on 1 January 2008 as the legal successor of three former organisations – the Hungarian Privatisation and State Holding Company, the Treasury Property Directorate and the National Land Fund - which were combined to make this new entity. The establishment of MNV Zrt. creates the organisational framework that enables the emergence of a single ownership approach concerning national assets. The law establishes that MNV is able to confer state-owned plots of land without competition to those who own an appropriate property that can be bartered.

Close to the motorway between Budapest and Székesfehérvá is the warmest lake in Europe, Lake Valence (or Velence). Covering around 26 sq km, a third of it reed covered, the shallow lake is home to a bird sanctuary and a centre for tourism, including thermal baths. A group of investors is planning to build a US$1.4 billion casino, King City, on the shore of Lake Valence and Joav Blum, one of the investors, has exchanged some farmland required for the M4 motorway for a state-owned lakeside plot. The transaction has caused concern and the state audit office has deemed the transaction invalid.

In February this year the Budapest Times reported: “Blum purchased the fields in 2007, raising suspicions that the investors may have received tips from well-informed sources on what land to buy and to exchange later.” The King City casino resort project is located in Sukoró and Blum’s company was registered there last year, according to the Times. Sukoró residents were said to be in favour of the project although some locals are starting to question the amount of land needed for the resort and the ecological effect it will have on the neighbourhood.

Now Hungary’s MNV has called for an expert assessment of the land exchange, saying that a professional debate over the land valuations is needed as some professional questions are outside its legal scope. The audit office maintains that only a fraction of Blum’s land was needed for a motorway and that the land could have been expropriated by the state. The Central Investigative Prosecutor's Office has been investigating the possible misuse of funds and one judicial expert says the value of Blum’s land was overstated by Ft600 million (US$3.2 million) in the transaction. (E-10.02.09)

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