Hungarian oligarch turns on his former ally PM Orban

BUDAPEST (Reuters) - Hungary’s Prime Minister Viktor Orban, whose ruling party faces growing discontent in its ranks, suffered a serious setback on Friday when a longtime friend and leading oligarch publicly turned against him.

Hungarian Prime Minister Viktor Orban addresses a news conference following his meeting with German Chancellor Angela Merkel, in Budapest February 2,2015. REUTERS/Laszlo Balogh

Orban’s Fidesz party has displayed cracks recently as his government committed policy errors and diplomatic gaffes, and seen its approval ratings drop by a third only a year after winning a general election.

Lajos Simicska, a high school and college friend of Orban’s, accused him of wanting to shut down independent media with planned changes to tax rates they pay on advertising.

Simicska, a former Fidesz treasurer, has long played an elder statesman role in the party, but his close relations with Orban seem to have soured since the prime minister was reelected in 2014 to another four-year term.

He is one of the wealthiest oligarchs close to Orban’s party, with wide-ranging business interests including the leading conservative daily newspaper Magyar Nemzet, news television HirTV and Lanchid radio.

The businessman, who rarely appears in public, told the investigative website that he would fight back.

“Of course the media, our media, will fight that and will not give a damn about what Orban says,” said Simicska, who could not immediately be reached by telephone.

“I take democracy seriously, and I take the role of media in the world seriously ... and I’ll insist on this as an owner,” he added.

His public break with Orban is the most serious conflict within Fidesz in the past 20 years, said Peter Kreko, director of think tank Political Capital.

“People have tried to deny it but the war around Fidesz exists and goes on,” he told Reuters. “Orban either pacifies this conflict very quickly or it could be damaging for him as well.”

The change would introduce a flat tax rate in place of a steep tax for the biggest companies that led to complaints by the German media group Bertelsmann, whose RTL Group operates in Hungary.

No new rate has been announced, but Simicska said the change would spread the tax burden among smaller media.

The editors of Simicska’s newspaper, television, radio and news website operations all resigned on Friday. According to two sources, they did not want to submit to pressure from him to criticize Orban and his government.

Simicska told he would personally lead HirTV and would appoint new editors to the other media.

A government spokeswoman declined to comment, saying Simicska’s statements were “an internal matter of privately owned media companies”.

Writing by Krisztina Than; Editing by Tom Heneghan