The Agrofert Group is not currently receiving any subsidies, said Czech Prime Minister Andrej Babis (ANO) during yesterday’s parliamentary debate on a vote of no confidence in his government, adding that he is still awaiting approval from two EU member states regarding the transfer of the group’s shares to a trust fund.
The Prime Minister was responding to part of a speech by Martin Kupka, leader of the opposition Civic Democrats (ODS), regarding Babis’s ongoing conflict of interest due to his ownership of Agrofert.
“Agrofert is not drawing any subsidies because I have not yet transferred the shares to that fund,” said Babis, who announced the irreversible transfer of the group’s shares to the RSVP Trust fund in December. A public announcement of how he would resolve the conflict of interest was a condition set by President Petr Pavel for Babis’s appointment as prime minister.
Agriculture Minister Martin Sebestyan (for SPD) repeated in the lower house yesterday that proceedings against the Agrofert Group regarding the return of agricultural subsidies had not been initiated. He said legal analyses and opinions are still pending, including from the State Agricultural Intervention Fund (SZIF), and they could be completed in late February.
Babis was supposed to resolve his conflict of interest within 30 days of his appointment as prime minister on 9 December. However, he remains the sole shareholder of Agrofert. In late January, the Prime Minister said he was still waiting for confirmation of documents for the transfer of shares from three EU countries. His statement yesterday suggested that he had obtained the confirmation from one of these. “I am waiting for the approval of two more member states to transfer the shares,” he told MPs.
In December, Babis announced that he would have no influence over the RSVP Trust. In mid-January, he said that his family would also have no influence. The assets will be transferred to Babis’s children only after his death.
However, Seznam Zpravy reported yesterday that the management of the fund would be transferred to Babis’s children when he leaves the government or resigns, according to the fund’s statutes.
“This is a fund with supposedly independent management, which, after the end of Babis’s involvement with the government, will go into the hands of his chosen descendants,” Transparency International Czech branch director David Kotora told the server. “They can then once again enable their father to have ties and influence over the Agrofert Group.”
According to the statutes, Babis’s children are to be guided by a “family code” when making decisions about the fund’s operations, but this code is not part of the statutes.
Babis insisted in a statement to CTK yesterday evening that he will never get his Agrofert shares back, will not benefit from them in any way, and that neither he nor his descendants will own them for the rest of his life.
“I handed over the entire preparation of the conflict of interest solution to experts, and they prepared it in such a way that it could not be considered a conflict of interest under either Czech or European law,” he said. “I understand that some people would like to strip me of all my assets, but that would take us back to the regime we struggled so hard to escape decades ago.”
Kupka said that Babis had not fulfilled his promise to solve his conflict of interest, citing this as one of the reasons why the government should not receive the confidence of the lower house. He labelled Babis a “subsidy predator”, arguing that Babis decides on subsidy titles together with the government, at the same time as his companies are still drawing subsidies.
Justice Minister Jeronym Tejc (for ANO) said Babis is not violating any terms set forth in the conflict of interest law. “Holding shares as such is not a business. And this has been established not only by legislators, but also by court rulings,” he said in the debate yesterday evening.
The RSVP Trust was established by the consulting company Roklen with legal support from the law firm DBK. Agrofert owns the chemical companies Deza, Fatra, Lovochemie and Precheza, as well as the food companies Kostelecke uzeniny, Krahulik, and Penam. It employs 29,000 people, including roughly 18,000 in the Czech Republic. It is one of the largest private employers in the country.
