Mol Deepens Ties With Orban Via $305 Million Endowment Pledge

(Bloomberg) -- Mol Nyrt. pledged shares worth 5% of the company toward a public trust set up jointly with the Hungarian state, the latest deal with the refiner’s stock that deepens ties with the government.

The company will allocate almost 43 million shares, worth 94 billion forint ($305 million), to the foundation with Hungary donating an equal amount of capital. The so-called Mol New Europe Foundation will take over a majority of Mol’s social responsibility operations with a focus on sport, culture, health and environment protection.

Opposition parties have criticized Prime Minister Viktor Orban for starting foundations to cement his influence before elections next year. The funds’ boards include government appointees with long mandates and their finances are exempt from rules safeguarding public spending. State-owned shares amounting to 20% of Mol have already been allocated to two funds financing colleges.

“These types of moves always carry negative connotations,” Tamas Pletser, Erste Bank analyst said in comments over phone.

Mol’s shares fell as much as 2.8% on Thursday, underperforming the benchmark BUX index.

Mol said the transaction may be finalized in the next two quarters, once parliament passes the necessary laws.

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