Hungary media group becomes battleground between PM, former ally

by Reuters
Wednesday, 21 October 2015 17:58 GMT

By Marton Dunai

BUDAPEST, Oct 21 (Reuters) - Hungary's second-largest television group has become a new battleground between Prime Minister Viktor Orban and a longtime ally and media baron who fell out with the feisty right-wing premier earlier this year.

Orban, often accused by critics of heavy-handedly trying to control Hungary's media, called for new loyal outlets in April after losing the support of the media baron, Lajos Simicska, a former high school classmate and for decades a key behind-the-scenes player in Orban's ruling Fidesz party.

At the heart of the dispute now is TV2 Group. It includes TV2, the country's second-largest privately-owned television station, as well as three other smaller cable channels, representing a big slice of the media market in Hungary.

TV2's nightly newscast often reaches close to one million viewers in the country of 10 million, making it a valuable platform for the prime minister and his allies.

Proxies of both Orban and Simicska are now vying for control of the group.

The group was part of Germany's Prosiebensat 1 Media SE , which sold it in 2013 to two TV2 chief executives, Zsolt Simon and Yvonne Dederick. They in turn resold it last week to Hungarian filmmaker and close Orban associate Andrew G. Vajna, who is also a government commissioner.

A longtime business partner of Simicska, Karoly Fonyo, immediately contested Vajna's acquisition. Fonyo said he had in fact bought TV2 just two days before Vajna's announcement, using a buy option that he had exercised.

TV2 said in a statement that Simon and Dederick were parties to an option contract but did not mention Fonyo. However, TV2 said it considered the buy option and its exercise illegal and insisted that Vajna's purchase would go forward as planned.

They did not say why they considered the buy option illegal.

Both Fonyo and the TV2 executives threatened lawsuits against each other over the case.

"Naturally we expect a legal procedure," Fonyo told the news channel ATV. "Both of those two (Simon and Dederick) had prior knowledge of (my) acquisition (when they sold TV2 to Vajna). I am as dumbfounded as anyone."

TV2 also said legal steps would follow.

"It was wholly unexpected and surprising that (Fonyo's company) would exercise its option without prior consultation or warning," it said. "It is completely unacceptable that they only informed TV2's owner-managers after they signed the purchase contract with (Vajna's company)."

Vajna said in a statement to Reuters through a spokesman that he had agreed to purchase TV2 Group in good faith, assured that the assets were free of claims and that the sellers were within their rights to sign the contract.

Orban's office could not immediately be reached for comment on the case. (Reporting by Marton Dunai; Editing by Gareth Jones)

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