Hungarian authorities are currently under scrutiny regarding irregularities in government contracts for Microsoft licenses, resulting in the potential return of 3.3 billion forints (approximately €8.5 million) in European Union funding.

The inquiry, ongoing for nearly six years, has yet to reach an indictment phase, with no suspects formally identified as of the latest reports.

In 2019, the U.S. Securities and Exchange Commission and the Department of Justice indicated they were investigating possible fraud related to the sale of Microsoft licenses in Hungary.

Allegations suggest that procurement may have been arranged through intermediary companies that worked in collusion with government officials to manipulate the pricing, causing contracts to be significantly more expensive than necessary.

This raised concerns about corruption, with some intermediaries potentially misappropriating funds for illicit purposes.

As the probe progressed, Microsoft acknowledged the discrepancies and agreed in a settlement to pay $25 million in penalties to U.S. authorities.

Hungarian entities mentioned in relation to the procurement irregularities include the Ministry of Interior, the National Police Headquarters, and the National Tax and Customs Administration, along with the State IT Development Company (NISZ Zrt.).

These licenses were procured with EU funding between 2013 and 2014, prompting the European Anti-Fraud Office (OLAF) to initiate its investigation in 2019.

Despite the apparent lack of progress from Hungarian authorities, OLAF reported concrete findings, asserting that the EU Commission successfully recovered 3.6 million euros in 2023 and an additional 4.7 million euros in 2024. Furthermore, it is anticipated that another 3.9 million euros may need to be reimbursed due to the irregularities surrounding the Microsoft procurement.

The investigation highlights that considerable EU funds allocated for Microsoft software acquisitions may need to be reimbursed by the involved Hungarian public institutions.

To date, these entities have reportedly lost 3.3 billion forints (around €8.5 million) and may face additional losses totaling 1.6 billion forints (approximately €4 million).

In addition to OLAF's investigation, the Hungarian Central Investigation Prosecutor's Office has been examining the matter.

After almost six years, there have been no indictments, although discussions between OLAF and Hungarian authorities are still ongoing.

The crux of the Microsoft case involves the resellers collaborating with Microsoft’s Hungarian subsidiary.

These resellers allegedly acquired licenses at significantly reduced rates, later selling them to government bodies, including the National Tax and Customs Administration and the National Police Headquarters, at inflated prices.

Investigations by the U.S. Securities and Exchange Commission found that resellers and officials might have colluded on the values and timelines of public procurement to share the price discrepancies.

The Microsoft controversy has led to the termination of partnerships between the tech giant and several Hungarian resellers, including the aforementioned Humansoft Ltd.

Notably, during the tenure of Gábor Felső, 4iG significantly expanded, securing substantial public contracts.

Previous suspicions arose regarding the allocation of a 1.5 billion forint EU grant to Humansoft Ltd., with limited outcomes visible in the locality of Mórahalom.

The ownership structure of 4iG saw changes under Felső, with connections to Duna Aszfalt, linked to prominent businessman Lőrinc Mészáros.

In 2018, Mészáros acquired control over the company group, marking a period of significant state contracts flowing in their direction.

Following the acquisition, Gábor Felső and another key figure departed 4iG; the latter transitioned to a ministerial role within the Prime Minister’s Office.