BUDAPEST: The Hungarian government on Thursday rejected opposition accusations of insider trading, after state funds were withdrawn from a brokerage firm just days before it went bankrupt.
The National Bank (MNB) suspended the licence of Quaestor brokerage on March 10, saying the company had issued more bonds than permitted.
The foreign ministry confirmed that one of its institutions had invested 3.8 billion forints (12.7 million euros, $14 million) in government debt through Quaestor, but decided on March 5 to withdraw the funds on Prime Minister Viktor Orban's orders.
"We firmly reject accusations against the government and the ruling party that have surfaced over the past few days," Orban's chief of staff Janos Lazar told journalists.
"The brokers abused the trust of investors and stole the money," he added.
The foreign ministry also insisted that its National Trading House (MNKH) had withdrawn the funds based solely on market developments and Orban's instructions.
"The ministry strongly rejects any accusation that suggests it had unlawful information," it said in a statement.
The ministry blamed the firm's collapse on the recent downfall of two other brokerages, which it said triggered a run on Quaestor.
Opposition Socialists on Wednesday called on Orban to resign after he said he gave the order to withdraw the state funds in order to protect them following the collapse of Buda-Cash brokerage last month.
"I asked every ministry to check if they have financial connections or park public money at any brokerage firms, and if so, they should withdraw the public funds immediately, because at a time when a domino effect looms, no public funds should be kept with brokerages," Orban said.
Government spokesman Andras Giro-Szasz confirmed that other ministries had also withdrawn investments from brokerages, but did not give further details.
Local media reported that Quaestor had been an important partner in Orban's so-called "eastern opening" policy, aimed at gaining access to Asian and African markets.
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