Hungarian prosecutors have ordered a police investigation into transactions involving shares of the oil company MOL to assess whether insider trading regulations were violated, the Budapest chief prosecutor's office said Thursday.
The police inquiry is the next step after a review launched in February by the National Bank of Hungary into share sales carried out by MOL officials. Those sales happened in the days following a suspension of crude deliveries along the Druzhba pipeline to Hungary on January 27. According to the statement from prosecutors, those shipments later resumed in late April.
Prosecutors said in an emailed statement that clarifying the circumstances of the share sales requires an investigation that can draw on current data - a process they indicated can only be completed through police work.
The Budapest police are conducting the probe on suspicion of insider trading, prosecutors added.
When the central bank disclosed its review in February, MOL issued a response stating that the company had always complied with the relevant laws in all respects.
Summary
The Budapest chief prosecutor's office has instructed police to investigate trades in MOL shares over questions of potential insider trading. This action follows a National Bank of Hungary examination begun in February into share sales by company officials that took place after the Druzhba pipeline was halted on January 27 and before it resumed in late April. Prosecutors have said the facts can only be cleared up through an investigation relying on current data, and police are proceeding on suspicion of insider trading. MOL has stated it complied with applicable laws when the central bank announced its probe.
Key points
- Budapest prosecutors ordered a police investigation into MOL share transactions to determine whether insider trading rules were breached.
- The police action follows a central bank review initiated in February into share sales by company officials.
- The share sales took place in the days after crude shipments on the Druzhba pipeline to Hungary were halted on January 27; those shipments resumed in late April.
Risks and uncertainties
- The precise circumstances around the share sales remain unclear and, according to prosecutors, can only be resolved through an investigation based on current data.
- The inquiry is proceeding on suspicion of insider trading, but no determination of guilt or regulatory outcome has been reported.
- While the National Bank of Hungary has reviewed the transactions, further legal and factual findings depend on the ongoing police work.
The information in this report is drawn from statements by the Budapest chief prosecutor's office and the earlier disclosure by the National Bank of Hungary. MOL's public reply at the time of the central bank review was that it had acted in compliance with relevant laws.