Malaysian businessman gets lion’s share of multibillion-dollar Hungary deal

A Malaysian businessman with close ties to local politicians has secured a giant portion of multibillion-dollar contracts from the government of Hungary for the supply of medical equipment, MalaysiaNow has learnt.

Vinod Sekhar, who operates a chain of companies and organisations under the Petra Group, has secured some RM2.5 billion worth of contracts to supply ventilators to the Hungarian government, among dozens of purchases amounting to billions of dollars by the east European country at the early stage of the Covid-19 crisis.

In one of many documents sighted by MalaysiaNow, Vinod was named as the representative for GR Technologies Sdn Bhd, a company with an address in Bangsar, Kuala Lumpur.

The Hungarian government agreed to pay a total of US$559,600,000, which at the time of the contract in May 2020, converted to about RM2.43 billion.

The agreement, dated May 21, 2020, was signed by state minister Csaba Balogh on behalf of Hungary’s Ministry of Foreign Affairs and Trade.

When contacted, a spokesman at GR Technologies confirmed such an agreement but was unable to provide further details.

Vinod, meanwhile, has not answered MalaysiaNow’s text messages and calls.

The 52-year-old Vinod, the son of the late BC Sekhar who was credited with modernising Malaysia’s rubber industry, was declared a bankrupt by the High Court in 2005 but cleared of his bankruptcy status last year.

Controversial buying spree

Vinod’s deal to supply ventilators to Hungary was one of scores of purchases by Budapest, which last year went on a buying spree for medical equipment to prepare the country in the face of the Covid-19 pandemic.

It also inked scores of deals with local and foreign suppliers, in what has been touted as the single biggest purchase of medical equipment by an EU member-state.

The move kicked up a storm, with opposition politicians alleging that the deals were opaque and overpriced and contributed to an oversupply.

Among them was vocal opposition MP Vadai Agnes, who called for an investigation into the purchases.

She told MalaysiaNow that her complaint was dismissed by the prosecutor-general.

“It didn’t come to me by surprise as this has been the procedure in Hungary for several years.

“The prosecutor-general who used to be the parliamentary candidate of the current ruling party sends my questions to the police, and the police reject the investigation in every case where government or ruling party representatives are involved,” said Agnes, an MP from the Democratic Coalition Party.

“For example, the Ministry of Foreign Affairs and Trade bought one ventilator unit for an average price of 19.8 million forints (RM270,000), while the National Healthcare Service Centre bought one unit for an average price of 10.8 million forints (RM147,000). And there is no explanation for such a price difference from the government,” she said.

Fellow opposition activist Katalin Boldis agreed that the procurement of the ventilators took place under “clearly suspicious circumstances”.

“The purchase was concluded in an unjustifiably large number of units, with inadequate quality, overpriced and vague details,” Boldis told MalaysiaNow.

Deaths on ventilators

Around the same time that the government was taken to task for its procurements, there were reports of high morbidity rates for Covid-19 patients on ventilators.

This prompted the Hungarian Medical Chamber to warn the government in April that the “deaths among those requiring ventilator treatment and intubation are disproportionately high”.

It added that in some parts of the country, 95% of patients on ventilator support had died.

The chamber urged the government to investigate whether the ventilators were being properly operated or if there were quality issues involved.

Agnes said it was difficult to establish whether the deaths were linked to the quality of ventilators bought by the government.

“We don’t have any information on this issue as our experts never had the chance to see either the contracts or the ventilators themselves,” she said.

Award-winning Hungarian journalist Babett Oroszi, who received some of the copies of the agreements, wrote that several crucial details were missing in the RM2.43 billion contract awarded to GR Technologies.

“The main text of the final contract did not even include unit prices. It just means that several machines would have to be imported for this money,” Oroszi wrote in November last year.

“We thought the annexes would become something, but the environment ministry ‘forgot’ to attach the document. If we calculate the average price, the result is one of the highest amounts: 28.1 million forints (RMM382,000) per machine.”

It was some months later that the government admitted it had purchased more ventilators than were needed, adding that it was trying to dispense of the excess by selling the units to other countries.

According to Agnes, the government bought 16,000 ventilators for a whopping 300 billion forints (RM4 billion) in the first round, eight times more than the number of people trained to operate them.

“As of June 1, 2020, 13,404 ventilators were still in two warehouses. Some were given to foreign countries, the rest are in Hungarian hospitals,” Agnes told MalaysiaNow.

‘Worst deal’

A Hungarian investigative journalist group described the purchase of ventilators by the government as the worst deal in the European Union.

Direkt36’s analysis showed that since March 2020, Hungary had been paying the highest price per kg for ventilators from China.

“During the peak of the coronavirus, in April this year (2020), for example, Hungary paid over 10 times more than Italy, and over 50 times more than Germany per kg of ventilators and associated equipment,” the group said in its report published in August.

Agnes is convinced that the oversupply was not accidental.

“I believe that the whole ventilator procurement is suspicious as the authorities knew the number of medical teams that could operate ventilators. Nevertheless, the Hungarian government bought much more of them.

“What is very annoying in this contract is the fact that as the number of ventilators purchased increased, the price of one ventilator didn’t decrease, but increased.”

And as Hungary goes to the polls next year, the ventilator issue is likely to take centre stage.

“If the united opposition wins, we will carry out a very thorough investigation into all these contracts, the quality and quantity of medical equipment purchased,” Agnes added.