Companies in Egyptian railway contract face bankruptcy crime charges

A criminal complaint has been filed against three liquidated companies involved in a major Hungarian-Egyptian railway contract. The companies—Ganz-MaVag International Kft., Magyar Vagon Dunakeszi Kft., and Ganz-MaVag Invest Zrt.—are suspected of bankruptcy crimes.

The investigation, initiated by the state liquidator Reorg, suggests that owners and management may have distributed dividends while knowing the companies' financial situations did not permit such payments. This follows a detailed audit of the firms' financial activities over the five years preceding their liquidation.

The legal issue stems from a 2018 agreement to supply 1,350 railway passenger cars to the Egyptian National Railways (ENR). While 1,066 units were delivered, the production of the remaining 284 cars stalled due to the Russian invasion of Ukraine, subsequent EU sanctions, and the withdrawal of the Russian partner. The resulting financing difficulties and increased costs led to the insolvency of the involved entities.

Efforts by the Hungarian Ministry of Transport and Investment to resolve the contract in Cairo have so far been unsuccessful. The remaining unfinished railcar bodies currently remain in Dunakeszi.