Report: Czech Republic should return 451 million crowns in EU subsidies due to PM Babiš' conflict of interest

Prague, Dec 3 (CTK) – The Czech Republic should return 451 million crowns of EU subsidies granted to the Agrofert firm, according to the audit of the European Commission which examined the conflict of interest of Prime Minister Andrej Babiš (ANO), the daily Denik N said today, citing its conclusion.

The EC argues that Babiš is still the final owner of Agrofert although he transferred it to trust funds. The EC is of the view that Babiš still dominates the funds, having a direct interest in the firm’s success.

In its final report, the EC said that all subsidies after February 9, 2017, when the amendment to the Czech law on the conflict of interest took effect, were paid unrightfully to Agrofert.

Babiš is still the final owner of the Agrofert holding and since February 2017 also of two trust funds which he directly controls, having a direct economic interest in the success of the holding, Denik N quotes the crucial passage of the 250-page text.

Babiš has repeatedly denied any conflict of interest. He says that since he transferred Agrofert to the trust funds, it is just his former firm.

On Monday, Babiš criticised the EU for interpreting Czech law while it did not have any authority for this.

The EC used just the national legislation on the conflict of interest to formulate its conclusion that despite the ban, the subsidies were paid to a company in which its owner’s conflict of interest could be proven.

The EC sent its audit report to the Czech Republic at the end of last week. Its conclusions insist on the preliminary report leaked to the media in spring. Due to the objections raised by Czech authorities, the text was prolonged from the original 71 to the current over 250 pages.

The wording of the audit is final.

Regional Development Minister Klara Dostalova (for ANO) said the Czech Republic had two months to express its position on the recommendations. If it rejects a part of the conclusions, it can still ask for a hearing over the affair in the EC, Dostalova said today.

The report says that 283.7 million crowns were paid for 17 projects unrightfully. These are, e.g., the projects in the Lovochemie chemical plant or the Penam bakery.

“Out of the total 98 subsidies for Agrofert, auditors checked a total of 36 projects. Due to the mistakes found, the Czech Republic should return another almost 168 million crowns,” the daily said.

As a result, the state might claim a total of 451 million from Agrofert’s firms.

The Czech Republic should also cancel the contributions to the subsidies in question, which it has provided from public sources, the daily said.

Agrofert spokesman Karel Hanzelka told CTK the firm did not yet know the content of the audit report.

He said the firm believes it had proceeded in keeping with the law and Babiš did not face any conflict of interest.