An unprofitable business decision is not automatically a criminal breach of trust. The questions are whether duties concerning entrusted property were breached and whether financial loss resulted. The circumstances known when the decision was made matter.
1. Why is a loss alone insufficient?
The Hungarian Criminal Code connects a breach of asset-management duties with resulting financial loss. A failed transaction or an adverse later market change does not replace proof of the statutory elements.
2. Which decisions may be examined?
Examples include related-party contracts, unusual payments, asset sales or persistently loss-making arrangements. Examine the decision-maker's authority, available information, approvals and business purpose.
3. Relevant records
- Contracts, quotations and market comparisons.
- Member or management resolutions and approvals.
- Performance records, invoices and banking documents.
- Correspondence and expert material used to prepare the decision.
Preserve documents in their original form. Retrospective alteration creates additional risk.
4. Different roles and interests
A job title alone does not establish liability. Actual management duties, signing rights, instructions and personal participation must be separated. The company and the individuals involved may have different interests.
5. First steps when an investigation begins
Preserve records, clarify the procedure and each person's status, and review the material with counsel before a substantive statement. See the white-collar criminal law practice page. The separate budget fraud article addresses a different offence and NAV-related situation.
Does shareholder approval settle the issue?
Not necessarily. Its content, the information provided to decision-makers and the nature of the entrusted property require case-specific assessment.
Sources: Hungarian Criminal Code, section 376; Hungarian Criminal Procedure Act.
This article is general information, not case-specific legal advice. Laws and procedural deadlines may change.