European Interest

More legal trouble for Czech PM

ŠJŮ/WIKIMEDIA COMMONS/CC BY-SA 3.0
A view of the Headquarters of Agrofert in Chodov, Prague.

The prime minister of the Czech Republic once again faces pressure over his business dealings. The billionaire, Andrej Babis, was slapped with a European Union legal document alleging a conflict of interest due to links to agribusiness companies that received European funds.

Seen by the Reuters news agency, the document could stir up political turmoil in the Central European country, where massive protests took place on November 23 after the minority government survived a no-confidence vote over an alleged fraud involving EU funds.

Babis, who before becoming premier in December 2017 served as finance minister since 2014, denied any wrongdoing on December 1, following media reports about the confidential document, which is meant to inform decisions by the European Commission.

The legal opinion, dated November 19, said “the situation of Mr Babis qualifies as a conflict of interest,” because he could “influence” decisions on the use of EU funds of which companies linked to him had benefited.

It added that the alleged legal breach could require the reimbursement of some of the funds and said Babis should sever all ties to the companies involved.

According to Reuters, the document says Babis was the “sole beneficiary” of two trusts into which his shares in the firms Agrofert and the Agrofert group were transferred. The trusts were set up by Babis in 2017 to address concerns about possible conflicts of interest.

The companies, through a network of dozens of agricultural, chemical and food businesses, received EU funds worth €82m in 2017 and many more in previous years.

“I’m in no conflict of interest, I act strictly by the law,” Babis told Reuters on December 1. “I don’t control or direct the trust funds, because I don’t even have time for it, being fully occupied by the prime ministerial job,” he said, adding that he had not seen the legal opinion.

According to the EU legal paper, Babis should set up a blind trust to end the conflict of interest.

Babis and his family should “sever all relations” with the two companies, the opinion said. Babis’ wife is one of the beneficial owners of the trust funds and sits in the board that oversees their management, the EU legal document says.

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