Hungarian authorities conducted an inspection at a BYD electric vehicle factory under construction in Szeged, Hungary, as part of a broader investigation into the Chinese automaker’s investment in the country. The factory, located in Hungary’s third-largest city, was visited by inspectors on Tuesday to verify the legal status of workers, including checking residency permits, social security documentation, contracts, and other relevant papers.

The inspection followed an announcement by Hungary’s Prime Minister Peter Magyar, who on Monday disclosed an inquiry into the role of former Hungarian Foreign Minister Peter Szijjarto in facilitating BYD’s investment. Szijjarto, who was closely involved in negotiating the factory deal in his previous government role, recently resigned from parliament to take an executive position at BYD overseeing external relations and new business development. His appointment sparked public concern over potential conflicts of interest.

Magyar stated that the government would scrutinize every aspect of Szijjarto’s involvement with BYD, including subsidies, tax breaks, expedited permits, environmental exemptions, and other state-funded benefits granted during the negotiation and approval process. He emphasized the intention to investigate any preferential treatment given to selected corporate entities.

Szijjarto has not publicly addressed the conflict-of-interest allegations and did not respond to requests for comment. BYD also declined to comment on the inspection or the ongoing investigation.

The controversy has unfolded amid a broader review by Hungary’s new government, which took office in May, into the scale and conditions of Chinese investments made under the previous administration led by Viktor Orban. The review focuses on compliance with labor regulations and environmental standards. Earlier this year, reports indicated that BYD required contractors working at its Szeged factory site to adhere strictly to Hungarian labor laws.

In addition to the BYD matter, Magyar revealed last week that an investigation is underway regarding Szijjarto’s interactions with Russia during his tenure as foreign minister, following reports that he may have briefed Moscow on European Union deliberations. This inquiry further reflects the new government’s approach to oversight of former officials’ conduct and Hungary’s external engagements.

Some Chinese business representatives have expressed concerns that the controversy surrounding BYD and Szijjarto could have wider repercussions, potentially affecting Chinese enterprises operating in Hungary. The investigation signals a period of increased scrutiny of foreign investments aligned with the government’s efforts to ensure transparency and legal compliance.