The Hungarian who laid the foundations of British Airways

In the spring of 2022, we told the life and miracles of the banker Alfred Loewenstein in a story that began, precisely, with his death in strange circumstances. On July 4, 1928, as his Fokker Trimotor was crossing the English Channel, the magnate opened the door that led to the outside of the cabin and plunged to his death. As the causes of the accident were never clarified, the shadow of suspicion loomed over all the characters who surrounded him. Inevitably, when looking for beneficiaries of a possible murder, the eyes turned to two men, Albert Samuel Pam and Frederick Szarvasy, both partners of Loewenstein.

Little is known about the early years of the life of the naturalized Czechoslovak Hungarian Szarvasy, a man with an air of mystery that would accompany him, as we shall see, even after his death. The son of a banker, he lived for a time in South America as a young man and in 1901 settled in London, where he worked in a discount bank called Montagu Oppenheimer, which allowed him to form a very close friendship with Baron Charles Montagu, a relationship that would open many doors for him. He soon prospered both in business and in his influence and made a name for himself in the field of restructuring and rescuing heavily indebted companies. By 1919, he had risen enough to be president and general manager of the British Foreign and Colonial Corporation, a company created nine years earlier specializing in taking companies to the stock market. When Szarvasy took control of the company, the owners were various British aristocrats, including Baron de Rothschild himself.In 1921 Szarvasy's services were requested to try and save the tire and rubber manufacturer Dunlop Rubber Company, which was heading towards bankruptcy. In the rescue operation, which was successful, Szarvasy involved the firm specializing in business crises with whom he collaborated, Clifford, Turner & Hopton, which today is the prestigious firm Clifford Chance. Throughout those first years of the decade, our protagonist was also hired by the Marconi Wireless Telegraph Company and by the steel sector company William Beardmore & Company.The interests of the Hungarian, who also became a British national, expanded to coal mines, banking, insurance, and the press. In the mining sector, in 1928 he acquired United Anthracite Collieries, which opened the doors to controlling 80% of the anthracite supply in South Wales. In 1923, through the British Foreign and Colonial Corporation, he led the merger of several private airlines that existed at that time in the United Kingdom, to create British Imperial Airways, which after a series of mergers, in 1974 would become the current British Airways, one of the two companies – along with the Spanish Iberia – that formed the IAG (International Consolidated Airlines Group) consortium in 2011.Through International Holdings and Investments, the investment firm that the aforementioned Loewenstein had created in 1926, Szarvasy came into contact with other great financiers of the time, such as Albert Samuel Pam and Loewenstein himself. The trio of magnates collaborated on many operations in both Europe and South America. In parallel, Szarvasy was financial advisor to the Panama Corporation, which was engaged in gold prospecting in that country at the end of the 1920s. In 1932, the company went bankrupt and the Hungarian had to face accusations of fraud. The agreements to settle the conflict ended up costing him a small fortune.Outside the business world, Szarvasy was passionate about opera, into which he invested a lot of money. He created the Covent Garden Opera Syndicate (CGOS) with the intention of securing funding for this artistic discipline. By the late 1920s, he managed to get money through record sales, concert broadcasts, and public subsidies. His fondness for music was not just as a music lover, but it is also said that he was a quite accomplished violinist.When he died, the mystery that had always accompanied him grew even greater, because despite being the best-known financier in the City of London, apparent owner of important companies and holder of a large art collection, his inheritance was a few thousand pounds sterling.