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Czech PM faces unlikely new threat over conflict of interest accusations

Prague, Czech Republic – Andrej Babis, the billionaire Czech PM and second richest man in the country, has long faced accusations of conflict of interest over his former business empire Agrofert.

Czech PM Andrej Babis was forced to transfer his ownership of Agrofert to a trust fund in 2017 to comply with new anti-conflict of interest legislation, commonly known as “Lex Babis”. Although the pressure has intensified since he became Prime Minister, “Andrej Babis has withstood mass protests demanding his resignation, a criminal fraud inquiry and an ongoing European commission investigation into his business practices”, The Guardian writes.

But in an unlikely new development, and in what many critics hail as an important breakthrough, the municipal council of Černošice – a small village of only 7.000 people outside of Prague, where Babis lives – has ruled that the Prime Minister is breaking conflict of interest rules by owning media outlets, including national newspapers and the country’s biggest commercial radio station. In its decision, the council was ruling over a complaint made by Transparency International, who wanted to prove that Babis remains the ultimate owner and beneficiary of Agrofert. The municipal council of Černošice is the first Czech institution to officially acknowledge that. The reason why the NGO brought the matter to Černošice is because conflict of interest complaints must be filed with the “relevant local authority” under Czech law.

Babis, who has always denied allegations of any wrongdoing since entering politics in 2011, immediately announced that he will appeal against this “politicized” ruling.

The ruling comes a few months after another scandal put in jeopardy Andrej Babis’ grip on Czech politics : last November, local reporters tracked down in Switzerland Babis’ son Andrej Jr., who told them he had been “kidnapped” and brought to Crimea a few years ago to stop him testifying in a case of misuse of EU funds facing his father, known as the “Stork’s Nest” affair. The Prime Minister again brushed off those accusations and claimed his son was “mentally ill”. In December, the European Parliament backed a resolution to suspend all EU funding to Agrofert and its affiliate companies pending the results of the European investigation.

Although the Černošice verdict might not have much of an impact in itself, apart from the fine of 200.000 Czech crowns, “it has implications for the European complaint”, said David Ondracka, director of Transparency International’s Czech office. “The European Commission has said that while it is looking at the matter and making its own assessment, it is also curious as to how the Czech authorities will deal with it. The possibility of the Černošice ruling being transferred to the European complaint really worries Babis”, he added.

Following the ruling, Greens MEP Bart Staes stated that “credit must be given to the Czech authorities that ruled in an independent and courageous way, given the political climate. The [EU] Commissioners must show the same level of courage.”

Headed by Kafkadesk's chief-editor Jules Eisenchteter, our Prague office gathers over half a dozen reporters, editors and contributors, as well as our social media team. It covers everything Czech and Slovak-related, and oversees operations from our other Central European desks in Krakow and Budapest.