Thursday, 19 July 2018

Committee approves return of EU subsidy in Babiš-related case

ČTK |
29 June 2018

Prague, June 28 (CTK) - The Regional Operational Programme (ROP) Central Bohemia's committee approved on Thursday the agreement with the Imoba firm on its return of the 50-million-crown EU subsidy for the Capi hnizdo centre, due to which Czech PM Andrej Babis is prosecuted, the regional governor has said.

Imoba is part of the Agrofert holding, which billionaire businessman Babis (ANO chairman) owned until last year when he transferred it to trust funds to avoid conflict of interest in his then capacity of finance minister.

Babis is prosecuted with another six people on suspicion of an EU subsidy fraud in the Capi hnizdo case. The suspects include his wife Monika, his brother-in-law Martin Herodes and his two adult children.

Imoba is returning the 50-million-crown subsidy to the Central Bohemia Regional Cohesion Council voluntarily since an independent and just assessment of the case in court cannot be expected in the foreseeable future, its spokesman Karel Hanzelka told CTK on Thursday.

The firm insists on having fulfilled the conditions for allocating the subsidy duly and not having violated contractual obligations, he added.

"A settlement is always better than some disputes," Jaroslava Pokorna Jermanova (ANO), the regional governor and chairwoman of the ROP Central Bohemia committee, said.

ROP Central Bohemia director Kamil Munia added that the firm should send the money back within five working days of signing the agreement. However, it is yet not clear when the agreement will be signed.

Most of the money from Imoba will end up in the state budget and a part will be sent to the region that co-funded the Capi hnizdo project several years ago.

Pokorna Jermanova said that over three million crowns would go to the regional budget.

"I welcome this as it is the most efficient and fastest way of returning the suspicious subsidy to public budgets," ROP committee member Veslav Michalik (Mayors and Independents, STAN) said.

If Imoba did not return the subsidy by the set deadline, it would face administration proceedings, in the form of a tax inspection. If Imoba were ordered in the proceedings to pay the subsidy, it might also have to pay a fine of the same amount according to the rules valid when the subsidy was allocated.

As soon as Imoba returns the subsidy, it will mean that the firm has not violated the budget discipline.

Under the current rules, this penalty is not imposed, however.

The Farma Capi hnizdo company, under its former name ZZN AGRO Pelhrimov, was a part of Babis's Agrofert chemical, food and agricultural holding in late 2007, when it changed its status to a joint stock company with bearer shares. In summer 2008, it gained a 50-million-crown EU subsidy within a programme for small and medium-sized companies, which it could never have gained as a part of Agrofert.

After a few years of meeting the subsidy condition, it rejoined Agrofert. At present, the Farma Capi hnizdo company is owned by Imoba.

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