Kassnar Imports (later known as KBI) was just that, an import company. They brought in several different types of AKs over the years. An original Hungarian SA-85M underfolder is something of a rare bird; if it's in excellent condition with all the original equipment, $1200 isn't out of line (I've seen them sell online for much more).
I saw where one sold recently on Armslist for $1600.00, so $1500 isn't out of the question. If the guy is wanting $1200, see if your bro can talk him down to $1000; that'd be a steal, and even if he (or you, whatever the case) ends up not liking it, he can flip it and make money.
That being said, I don't care for underfolders AT ALL and wouldn't put $1000 into one, regardless of quality, if it was something that I was looking at actually using myself.
Kassnar is the only recognized importer of pre-Bush1-ban Hungarian AKMs. From what I have read only approximately 3000 total fixed stock and underfolders were imported. Don't quote me but I believe the underfolders made up 2000 of those.
They are highly sought after by AK collectors, and having the box is even better.
Personally if I came across one these days in that condition for $1200 I would have a very hard time passing it up. Actually my bank account would be down $1200 faster than they knew it!
If you like AK style rifles, that is one very collectible version your brother found.