Former Hungarian central bank chief Matolcsy detained in probe into loss of bank funds

Former Hungarian central bank ​governor Gyorgy Matolcsy was detained on Wednesday in an investigation ​into foundations set up by the bank during ‌his tenure, ​which prosecutors say caused significant financial losses.

The case involves a network of foundations and companies the central bank set up under Matolcsy. Since early 2025, prosecutors and police have been examining how more than ‌266 billion forints ($817 million) of central bank money moved through them. Prosecutors say this caused a particularly significant financial loss. The investigation began after a State Audit Office report raised concerns about investments made by a foundation set up by the National Bank of Hungary (NBH) and by Optima Investment Ltd, which managed the ‌foundation's assets.

"As part of the investigation ... today the Office questioned and detained former NBH governor Gyorgy Matolcsy and his accomplices as suspect," prosecutors ‌said. They said they initiated an international arrest warrant against two more people, adding that Matolcsy refused to testify in the case.

Matolcsy's lawyer, Pal Batki, told Reuters his client had been detained. "The suspicion against my client can be summarized as a very complex set of allegations, which we have not yet had the opportunity to fully review and process," he said. News ⁠site Telex, ​citing Batki, said Matolcsy was ⁠questioned over suspected fraud causing significant financial losses and the use of a forged private document. He said that prosecutors were seeking to arrest the former governor, and a court ⁠would decide on that this week.

Matolcsy said in April that the bank had no legal mandate to interfere in the foundations' operations because they "were acting independently". Prime Minister Peter ​Magyar, who ousted Viktor Orban in an election in April, has said the central bank's past operations must be investigated, and his ⁠ruling party has also set up a parliamentary committee for that purpose.

In May, Hungarian prosecutors and police seized some 92 billion forints ($300 million) in funds and securities as part of ⁠a ​money-laundering investigation involving foundations set up by the central bank years ago. Prosecutors said that in 2014, under Matolcsy, the NBH established the Pallas Athene Foundations and gave them public money from the central bank's exchange rate gains.

On February 28, 2025, Matolcsy's penultimate working day as central bank ⁠governor, a private equity fund represented by Optima concluded what prosecutors called a sham securities lending agreement, they said. Prosecutors said the agreement aimed at ⁠transferring control over the foundation's assets "to a ⁠circle of persons over whom Matolcsy would continue to influence after the expiry of his mandate as Governor, with the aim of enabling him and his son to make investments with the assets for their own ‌purposes in order to ‌make a profit."

($1 = 325.4200 forints)