European Interest

The removal of Capi hnizdo from EU-subsidised projects

Flickr/Wendy/CC BY-NC 2.0
A view of the Czech Ministry of Finance, Prague.

Capi hnizdo (Stork Nest) firm, whose suspected fraudulent drawing of an EU subsidy has been investigated by the police, will be deleted from the list of EU-subsidised projects.

“In my opinion, we will propose the deletion,” said Czech Finance Minister Alena Schillerova, adding that the European Commission recommended this step in its letter from December 18.

“We take the letter very seriously,” she said.

As reported by the Prague Daily Monitor, the police have accused 11 people in connection with the 50m-crown subsidy, including ANO leader and the new prime minister, Andrej Babis, and his party’s deputy chairman Jaroslav Faltynek.

By the end of the week, the ministry will convey its decision on Capi hnizdo’s deletion to the relevant institutions such as the Regional Operational Programme in Central Bohemia (ROP SC), which approved the subsidy for the Capi hnizdo farm and recreation resort in August 2008, Schillerova told journalists.

The subsidy drawn by Capi hnizdo was checked by the European Anti-Fraud Office (Olaf) in recent months, and its final report on the enquiry, including recommendations, is now being studied by the European Commission.

Until late 2007, the Farma Capi hnizdo company, whose previous name was ZZN AGRO Pelhrimov, belonged to Babis’s Agrofert Holding concern. Afterwards, its stake was transferred to bearer shares for a small firm to reach a 50m-crown EU subsidy, which a firm of the huge Agrofert Holding could never get. It observed this condition for a few years, but later it again returned to Babis’s concern.

Critics say the transactions amounted to a subsidy fraud, reported the Prague Daily Monitor.

Opposition TOP 09 deputies’ group head and former finance minister Miroslav Kalousek said he has read the OLAF report but does not have it, otherwise he would have released it to the public.

“The report clearly states that the subsidy was won fraudulently based on untrue data submitted by the applicant and that the subsidy should never have been paid,” Kalousek said.

Earlier this week, the Prague Municipal State Attorney’s Office recommended that the ministry should not release the Olaf report as it could thwart the ongoing criminal proceedings.

Even Schillerova has not read the Olaf report, which, she said, is available to a narrow group of ministry officials only.

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