Forbes: Orban spreads influence in region through telecommunications, other investments

NEWS 14.12.202315:47
REUTERS/Bernadett Szabo

Hungarian companies have doubled their presence in the Albanian economy. Not just so as to make profit, but also to create networks of political influence, reads an article of the Bulgarian Bureau of Investigative Reporting and Data (BIRD).

According to the article, the Austrian daily Der Standard published material on the sale of Telecom Albania to Bulgarian investors and its resale, with huge profit, to the Hungarian Telecom. The investors are by no means random. BIRD and Der Standard worked together to unravel this scheme.

“Hungary has big plans for 2024. The country takes over EUFOR, the European peacekeeping force in Bosnia and Herzegovina. In addition, Hungary is becoming an increasingly important economic factor in the region,” reads the article.

An example of this is an investment in the telecommunications sector in Albania. According to Der Standard’s research conducted together with the Bulgarian investigative portal BIRD.BG, in March 2022 Hungarian company 4iG acquired just over 80 percent of ALBtelecom shares and the company ONE Telecommunications. In January 2023, 4iG merged the two companies. Additionally, 4iG transferred its shares by increasing the capital of the state company Antenna Hungaria. This way Hungary acquired ownership of Albanian telecommunications.

“There are very few companies in Hungary that have received as much support and attention from Hungarian Prime Minister Viktor Orban in recent years as 4iG. In the course of 2021 they also acquired a company in Montenegro. The 4iG company also has a stake in the German Rheinmetall, a company that operates in the field of defense, and in the Israeli satellite company Spacecom. Now, following an agreement with Telecom Egypt on the supply of a high-performance underwater cable, they also want to build a data center in Albania,” said BIRD.

Overall, Hungarian companies have doubled their presence in the Albanian economy over the past four years. The Hungarian OTP Bank acquired shares in banks in Albania from the French Societe Generale and Greek Alpha Bank. According to the Albanian business magazine Monitor, Hungarian investments increased almost 37 times compared to 2018.

Key player in Central Europe

Mario Holzner of the Vienna Institute for International Economic Studies (WIIW) said Hungary is mostly involved in the areas that do not require much technological contribution. “The goal is to become a regional champion, it is a geoeconomic plan,” said Holzner.

Orban wants to make Hungary a central player in Central Europe. He sees the Western Balkans as an ideal ally because there are authoritarian politicians in the region who are not interested in the rule of law and do not mind the creation of an illiberal bloc in Europe, read the article.

It adds that, in this context, investments serve not only to make money, but also to create political networks. In any case, through the purchase of telecommunications companies, the Albanian market has de factor become a duopoly between 4iG and Vodafone.

“Albania’s competition authority clearly didn’t mind. However, upon closer examination, the whole sales process seems strange,” reported BIRD.

According to a survey by Der Standard and BIRD.BG investigative journalists, in 2019, OTE (part of Deutsche Telekom) sold One Telecommunications – the second biggest operator in the Albanian telecommunications market – for just 50 million euros to Bulgarian investors in the company Albania Telekom Invest (ATI). However, in 2022, it was resold to the 4iG company for over 120 million euros. In addition to Elwin Guri, a Bulgarian businessman of Albanian origin, the Bulgarian investors also included Atanas Dobrev, the then CEO of the Bulgarian telecommunications company Vivacom.

Common goal

BIRD reported in the past, and now again that Mariana Nikolova Dimitrova, the wife of A1 Bulgaria CEO Alexander Dimitrov, was also involved in the business, despite the fact that Vivacom and A1 Bulgaria are competitors. “But Dimitrov and Dobrev know each other very well. Thus, in Bulgarian telecommunications companies Who is Who close a deal in Albania together, despite their competitive situation,” said the research.

In February 2022 Dobrev founded Malvex Invest Ltd., and later transferred 100% of his shares to Dimitrov’s wife – Mariana Nikolova Dimitrova. The transfer was entered in the Bulgarian Trade Register with a nine-month delay. According to the Cypriot Trade register, on March 9, 2022, Malvex Invest became a shareholder in Albania Telecom Invest (ATI), with a sole investor – Dobrev, despite the fact that the company was already owned by Dimitrova. A day later, on March 10, 2022, the Albanian Competition Authority approved the sale of ONE Telecommunication to the company 4iG.

Successful deal

“Dobrev and the Dimitrov family obviously picked the right moment, because the deal with the Hungarians was extremely advantageous. The Bulgarian Regulatory Telecommunications Commission claims that it has no information about the possible involvement of the Dimitrov family in the investment in Albania,” said BIRD.

It also noted that the A1 headquarters in Vienna saw nothing disturbing about this deal. According to A1 spokesperson Michael Hofler, this is a private investment. Furthermore, the charges were verified by an external auditor. “There is no violation of A1 policies, because A1 does not operate in Albania. The audit carried out by external auditors did not reveal any violation of the applicable legal and internal compliance standards in the assessment of the situation described,” said Hofler.

Dimitrov would have been obliged to report the investment only if the issue of competition was raised. In addition, A1 Bulgaria is one of “A1 subsidiaries with the best performance.” BIRD concludes that it remains unclear as to why the investment was made through Dimitrova, an interior designer, rather than through Dimitrov himself.