UPDATE 1-Mota-Engil finds management fraud at Hungary unit

(Adds analyst's comment, updates share price to close)

* Mota finds "irregularities" caused by "fraudulent acts"

* Initial estimates show loss of $19 mln

* Fires board of Hungarian branch, calls in external audit

* Stock slumps, underperforms market

* Analyst says Mota's Eastern Europe ops bad for valuation

LISBON, Dec 4 (Reuters) - Portugal's largest construction company, Mota-Engil (MOTA.LS), said on Thursday it had discovered accounting irregularities at its Hungarian unit, which it blamed on one of the branch's directors.

It said preliminary estimates showed a negative impact of some 15 million euros ($19 million) on net assets of Mota-Engil Magyarorszag.

"Although without a full audit scope, it allowed to conclude on the existence of irregularities in the company's financial statements regarding the current and previous years, caused by fraudulent management acts by the above mentioned director," Mota said in a statement.

The company said it would take legal action against the director, whose name was not revealed and who no longer works for the company.

It also said it had fired the board of the Hungarian branch after finding "strong evidence of failure of due diligence duty" and had called an external audit to determine the exact impact.

The statement was posted on the web site of Portugal's stock market regulator CMVM (here).

Mota's stock slumped nearly 6 percent to 2.2 euros in late afternoon trading, but recovered some ground just before the close to finish 3.29 percent lower at 2.26 euros, while the broader market in Lisbon edged up 0.25 percent.

Millennium Investment Banking's analyst Antonio Selada said in a research note on Thursday that Mota's Eastern European expansion has been "very difficult" and harmful for the company's valuation.

"We understand the rationale of the operations, with Mota trying to benefit from European funds and reduce dependence on the domestic market where growth prospects are low, but it has clearly been a value-destroying operation," he said.

"On various occasions we have raised the question whether it would not be better to sell those assets," Selada wrote. He estimated a 7 euro cents impact on the stock from the discovered fraud. Mota-Engil also works in Poland, Romania, the Czech Republic and Slovakia. (Reporting by Andrei Khalip; editing by Simon Jessop and Rupert Winchester) ((andrei.khalip@thomsonreuters.com; (351) 213-509-209; RM: andrei.khalip.reuters.com@reuters.net)) ($1=.7894 Euro)