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Czech Election Favorite Faces Fraud Charge

Mogul Andrej Babis accuses political rivals of setting him up to derail his swift rise to power.

10 October 2017

Andrej Babis (pictured), a former Czech finance minister and current front-runner to become the prime minister, said yesterday he has been formally charged with fraud in a case involving a 2 million euro EU subsidy.

 

“I have received a decision on the commencement of criminal prosecution in the pseudo-case … I immediately appealed this decision,” Babis said, Reuters reports.

 

The deputy leader of Babis’s ANO party, Jaroslav Faltynek has also been charged with fraud, an ANO spokesperson said.

 

The development comes just 10 days before parliamentary elections which the centrist, mildly eurosceptic party led by the billionaire Babis is forecast to win handily. Parliament voted on 6 September to lift immunity from Babis and Faltynek, a former board member of Babis’s Agrofert group.

 

The case surrounds allegations that Babis hid his ownership of a farm and conference center called Stork’s Nest so it would qualify for a 2 million euro EU subsidy, one only meant for small enterprises.

 

Babis’s Agrofert group, the largest private employer in the Czech Republic, would not have been entitled to the subsidy.

 

Babis claims his children, his partner, and her brother owned the farm at the time of the subsidy application, in 2008.

 

Both Babis and Faltynek have repeatedly denied any wrongdoing, with Babis insisting the allegations were trumped up to prevent him from taking power, Bloomberg reports.

 

Potential coalition partners of ANO have indicated that they will refuse to cooperate with Babis after the elections if he is still a suspect in the case.

 

It is unlikely that a court decision will be made before the vote on 20-21 October, requiring police to once again ask parliament to lift Babis’s immunity if he wins the election in order to proceed with the prosecution.

 

A survey in late September showed ANO polling at 27 percent, twice the support of its nearest rival, the Social Democrats, currently the ruling party, Reuters reported.

 

 

  • A company in the Agrofert group owned the farm, later renamed Stork’s Next, until 2007 when the company issued anonymous shares, in effect hiding the farm’s ownership, reports Mlada fronta Dnes.

 

  • After the expiration of a five-year period for adhering to the conditions of the EU subsidy, in 2014 Stork’s Nest Farm became an asset of the Imoba company, whose sole shareholder is an Agrofert company called SynBiol, according to the paper.

 

  • Mlada fronta, the country’s best-selling mainstream daily, was owned by Agrofert until Babis ring-fenced it and other assets in a trust fund in February after the passage of a conflict of interest law, which Babis said was aimed solely at him.

 

  • Babis has gained popularity by attacking traditional parties for being corrupt and incompetent managers, writes Bloomberg, adding that his rhetoric “echoes the populist appeals of forces on the rise across Europe.”

Compiled by Claudia Harmata

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