Hungary receives billions of euros worth of EU development funds each year and they are an important driver of economic growth.
The EU is currently preparing for tough negotiations on its next seven-year spending plan, with some countries calling for a reduction in generous funding for the ex-communist east.
And now the European Anti-Fraud Office (OLAF) has looked into 35 public lighting projects and has sent a report containing financial recommendations to the European Commission, the EU’s executive arm, and its judicial recommendations to Hungarian prosecutors.
An OLAF spokesman said: “OLAF’s investigation revealed not only serious irregularities in most of the projects, but also a conflict of interest.”
Hungary’s general prosecutor’s office said it would examine OLAF’s recommendations and the government said it supported the investigation.
A source close to the case said the projects, which modernised street lamps in several towns, had been run by Elios Innovativ Zrt from 2011 to 2015.
Istvan Tiborcz, who married Mr Orban’s daughter Rahel in 2013, was a member of the Elios board from 2009 to 2014 and he sold his stake in the company in 2015.
In an interview last October Mr Tiborcz said he sold his Elios stake due to “continuous attacks against me – and thus my family – which were based on presumptions”.
He also said he had been subject to “false defamatory allegations”.
A Hungarian government spokesman said authorities had previously investigated the projects cited by OLAF.
He said: “We support the current probe as well. The appropriate approach is if Hungarian authorities probe all the recommendations of OLAF.”
Following a separate OLAF probe, Hungary said in November it could face a big EU penalty over financial irregularities in the construction of a metro line in Budapest that had been started under the previous Socialist government.