US firms up MTel stake; state widens investigation into telco

23 Sep 2009

Hungary’s dominant telecoms group Magyar Telekom (MTel) has announced that Capital Research and Management Company, a US-based investment adviser that manages The American Funds family of mutual funds, has acquired additional shares, boosting its MTel stake to 5.0492%.

In a separate development, the Hungarian National Bureau of Investigation (NNI) has informed MTel of its decision to widen its investigation into allegations that the incumbent misappropriated funds, to include fresh accusations that the telco misused personal data on its own employees, MTI-Econews reports. The bureau has opened a criminal investigation into allegations that MTel embezzled certain funds made in connection with the company’s ongoing internal investigation into contracts signed by members of the Magyar Telekom Group. ‘The company cannot predict when the internal investigation or any of the ongoing governmental investigations will be concluded, what the final outcome of those investigations may be, or the impact, if any, they may have on its financial statements or results of operations. Government authorities could seek criminal or civil sanctions, including monetary penalties, against it or its affiliates, as well as additional changes to its business practices and compliance programs,’ Magyar Telekom said.

Hungary, Magyar Telekom