Wednesday, 26 July 2017

Deputy PM Babiš defends discrepancies in his income reports

ČTK |
7 April 2017

Prague, April 6 (CTK) - The discrepancies in the data that Czech Finance Minister and Deputy PM Andrej Babis (ANO) stated in a report on his income and those he released in an income audit are caused by the substance and different purposes of both documents, he said in a letter he posted on Twitter on Thursday.

The figures in the property statement cannot correspond to those from the audit, which also includes data from tax returns, billionaire businessman Babis said on Thursday when the lower house mandate and immunity committee would deal with the discrepancies in both documents.

Babis also tweeted he wished that the lower house committee also dealt with the income of his political rivals, PM opposition Social Democrat (CSSD) chairman Bohuslav Sobotka and opposition TOP 09 head Miroslav Kalousek, in the past 20 years.

Chamber of Deputies controlling committee head Vladimir Konicek (Communists, KSCM) called on the mandate and immunity committee to look into different data in the documents. The committee has no power to impose sanctions, however, it can transfer the case to a hearing of an administrative delict at the place of Babis's permanent residence.

In March, Babis released the results of the EY and PWC auditing firms' reports on his income. They confirmed that his total income, including taxed sums and those exempted from tax, amounted to 2.4 billion crowns in 1996-2015, and consequently, he could afford to purchase the Agrofert bonds for some 1,5 billion crowns.

The media pointed to the discrepancies between these figures and the data in Babis's property statements.

Babis explains this saying his property statements include gross instead of net income.

Babis is criticised for the purchase of one-crown bonds issued by the Agrofert concern, which he owned until February, for 1.5 billion crowns in 2013. The lower house budget committee expressed a suspicion that law was circumvented by issuing these bonds, which were not subject to tax, in 2012. Babis repeatedly dismissed any wrongdoing.

He transferred Agrofert to a trustee fund in early February to comply with the amended conflict of interest law that bars firms controlled by ministers from access to public contracts, state subsidies and incentives.

Now, Babis explains in a letter that property statements include all income, including the sums that are not in tax returns, for instance, the income exempted from tax and accepted instalments of loans. Unlike a tax return, a statutory declaration (property statement) does not include income from executing a public official's post, Babis said.

"Consequently, the figures in both documents cannot correspond to one another as a matter of principle," he added.

Konicek previously said the figures in Babis's reports were controversial even if his gross and not net income was stated.

The mandate and immunity committee will decide whether these discrepancies are so evidential that the matter should be submitted to a hearing of an administrative delict, its chairwoman Miroslava Nemcova (Civic Democrats, ODS) said.

Committee deputy head Martin Plisek (TOP 09) would like to propose this step.

Under the conflict of interest law, the authorities could impose a fine of up to 50,000 crowns on Babis.

Babis, 62, who lives in Pruhonice near Prague, is the second richest businessman in the Czech Republic, after PPF investment group owner Petr Kellner, according to the Forbes magazine that has put his property's value at 85 billion crowns.

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