Czech PM Babiš: 'The audit report did not include all of my income'

Prague, Oct 5 (CTK) - Beleaguered Czech Prime Minister Andrej Babiš continues to dismiss allegations of money laundering in connection with the release of the Pandora Papers.

Czech Daily Hospodářské noviny (HN) reports that based on his tax return audit from 2017, Babiš would not have had enough money to buy the property in question. The Czech PM told iRozhlas, however, that the audit did not include EUR 19.5 million in his accounts in 2009, enough to purchase his French real estate holdings.

On Sunday, Investigace.cz revealed that Babiš, with the aid of French and Panama-based legal offices, had anonymously established shell companies in 2009 and used these structures to transfer EUR 15 million euros (then the equivalent of CZK 381 million) from one firm to another essentially, "loaning" himself the funds to purchase luxury properties in France including the Bigaud Chateau in the French Riviera.

More than 300 Czechs, including an ex-minister, local politicians, media, and real estate moguls, were implicated in the leaked documents known as the Pandora Papers, a global effort led by investigative journalists.

The documents describe the suspicious financial transactions of about 100 politicians as well as celebrities and others from more than 90 countries. The project also mentions the presidents of Ukraine, Kenya, and Ecuador, former British PM Tony Blair and 130 billionaires from Russia, the U.S., and Turkey.

Babiš has denied any accusations of money laundering. He argues that 12 years ago, he provided a duly taxed loan and defended himself with the audit of his incomes from 2017; the authors of the Investigace.cz report say the audit does not meet international standards.

In response to the accusations on Monday, Babiš admitted on Czech Television that the complex financial dealings were inappropriate for a politician, but said that at the time, he was not yet involved in politics. Investigace.cz, however, reports that Babiš was involved in the off-shore schemes last year.

On Tuesday, Babiš admitted that the property is held in his trust funds, server Tn.nova.cz wrote.

"I did not lack the money to settle the transaction that took place in September 2009. For the the15-million-euro purchase, I had at that time EUR 19.5 million available in my accounts that were duly taxed in the Czech Republic," the PM told iRozhlas.

Babiš noted that the audit report covered selected revenues, but that he also had other taxed money not listed in the audit.

Babiš as then deputy PM and finance minister used the EY and PWC international auditing firms. He wanted to prove he had sufficient means to buy the bonds of the Agrofert concern, which he transferred to trust funds in early 2017 when he was finance minister to meet the conflict of interest law.

The EY and PWC auditors confirmed Babiš's statement and said that in 1996-2015, his overall income amounted to CZK 2.4 billion. Hospodarske noviny wrote that in 1996-2009, Babis received CZK 60 million from his Agrofert concern and received CZK 161.3 million for Afeed stock sales. As a result, he would lack some CZK 160 million to buy the real estate in France.

The following year, Babiš sold Profrost stock shares for CZK 527.5 million. Assuming he might have taken a loan for the transaction, he could have partly paid it, HN writes.

Ahead of the Czech general elections this week, the ANO party has said it stands by the prime minister.

"A few days before the elections, a 12-year-old transaction was brought into the limelight, in which the prime minister, as a businessman then, did not violate the law, paid taxes and Czech taxpayers did not lose a single crown," ANO deputy group head Jaroslav Faltýnek said.

Opposition leader Ivan Bartoš (Piráti) said, "In recent days, Babiš's scandal has virtually shaken the world. Andrej Babiš laundered almost CZK 400 million through firms in tax havens in order to buy property on the French Riviera."

The Czech National Organised Crime Centre will handle the case.