Wednesday, 13 December 2017

Agrofert dismisses suspicion of tax optimisation

ČTK |
17 March 2017

Prague, March 16 (CTK) - The Czech Agrofert board dismissed on Thursday the suspicion that the holding committed tax optimisation in the past and defended the purchases of firms from its former owner Andrej Babis (ANO), saying they were logical from the business point of view.

Babis transferred Agfofert to a trustee fund in early February to comply with the conflict of interest law which took effect later last month. The law bars firms controlled by ministers from access to public contracts, state subsidies and incentives.

The board also wrote in a press release on Thursday that the issuing of one-crown bonds in 2012 was needed.

Babis has come under criticism over his deals with Agrofert because of the purchases of its bonds. The Chamber of Deputies called on him to explain the matter by the end of April.

"The inclusion of the firms in the concern clearly followed up the production and business activities of our group. All necessary legal duties were fulfilled in the purchase of the firms," the board wrote on the purchase of Afeed, Afeed SK and Profrost from Babis.

Media have speculated that the selling price of these firms was too high and that the sale may have been used to cover up the payment of Agrofert dividends to Babis.

Dividends are taxable, but Babis did not have to pay taxes from the sale of shares of his firms to the holding.

Agrofert has rejected this. "The fact that the mentioned firms are now doing high profits confirms the correctness of our steps," the board said.

It also defends the 2012 issuing of one-crown bonds, for which Babis paid about 1.5 billion crowns.

"We proceeded fully in keeping with valid legislation and we are not aware of any mistake or illegal steps. We are convinced that the relevant state bodies will draw the same conclusion," the board wrote.

It wrote that the bonds were issued in order to secure the long-time financing of planned investments. The 6 percent interest on ten-year bonds is usual and an expert opinion has also confirmed this.

The Agrofert board wrote that media information as well as the debate on the matter in the Chamber of Deputies harm the firm's good name.

It reassures that the firm has done nothing illegal.

"Regretfully, we must say that we have fallen hostage to political rhetoric and the political struggle in this election year," the holding board wrote.

A general election will be held in October.

The Chamber of Deputes called on Babis on Wednesday to refute by end-April "serious" suspicions of tax evasion in connection with his deals with Agrofert which he owned before.

Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) called on Babis on Thursday to respect the Chamber of Deputies' resolution.

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