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Czech News in English » News » National » PM insists bodies must react to one-crown bonds controversy

PM insists bodies must react to one-crown bonds controversy

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Prague, March 13 (CTK) – Czech PM Bohuslav Sobotka insists that the tax administration must react to MPs’ suspicion that law was circumvented in connection with one-crown bonds, he said after meeting the other two coalition parties’ leaders, including Andrej Babis who bought such bonds in 2012.

The Coalition Council comprised of Sobotka (Social Democrats, CSSD) and Deputy Prime Ministers Babis (ANO) and Pavel Belobradek (Christian Democrats, KDU-CSL) and their parties’ deputy heads discussed the problem of the bonds at the request of Sobotka, though Babis was opposed to it.

Some time ago, Sobotka asked Babis, who is also finance minister, to explain the circumstances of his purchase of the bonds from the Agrofert holding which he owned at the time.

The lower house budget committee recently expressed suspicion that law was circumvented by issuing one-crown bonds, which were not subject to tax, in 2012.

“It is necessary that the tax administration clearly react to the budget committee’s resolution. The CSSD insists that the budget committee must receive a clear and concrete answer,” Sobotka said.

The tax administration falls under the Finance Ministry.

“I have asked the finance minister and the relevant deputy finance minister to ensure the Finance Ministry’s reaction to the budget committee’s resolution and provide the maximum information by the deadline as required by the committee,” Sobotka said.

ANO deputy chairman Jaroslav Faltynek said ANO believes that the budget committee’s resolution is at variance with the law on the Chamber of Deputies and that the committee is not empowered to assign tasks for the tax administration to fulfil.

Faltynek said ANO considers the uproar around the bonds the CSSD’s marketing step ahead of the October general election.

Belobradek told Czech Television that the debate on the bonds was rather inconclusive at the meeting on Monday, when Sobotka and Babis “made certain things clear to each other.”

The tax administration will react to the budget committee’s doubt based on the coalition parties’ agreement, he said.

Sobotka said the tax administration’s expected information should show that the office works independently and correctly.

Babis purchased one-crowns bonds issued by the Agrofert concern, which he owned until February, for 1.5 billion crowns in 2013.

Babis previously said the tax authority is regularly checking the bonds and assesses their taxation additionally.

Earlier on Monday, Sobotka said the issue must be discussed at the Coalition Council.

“This is not only about Andrej Babis, but about all suspicious situations,” he said.

Babis said the committee was just gathering pre-election points for the CSSD leaders by its resolution. He accused committee chairman Vaclav Votava (CSSD) of abusing his post.

“At the meeting of the budget committee, its chairman Votava did not respect the originally announced agenda and under his leadership, the meeting turned into a mixture of abusing powers, political proclamations and exerting pressure on civil servants,” Babis wrote earlier on Monday in a letter to Sobotka, released to CTK.

However, Votava dismissed the accusation. “I included the point in the budget committee’s agenda on the basis of the deputies’ request,” Votava said.

The committee has a controlling function in relation to the finance ministry and directorate, he pointed out.

Votava said the deputies only wanted to know the authority and its general director Martin Janecek’s stances on the one-crown bonds issue.

Thirteen out of the 16 deputies present, representing various parties voted for the resolution. Only ANO MPs abstained from the vote, he said.

The lower house budget committee adopted a resolution, in which it assigned the tax administration to look into one-crown bonds.

Babis said in his letter that the committee had no authorisation to this. Next time, the lower house deputies can give assignments to the police and courts, he added.

Babis called the including of the bonds in the coalition council’s agenda scandalous.

“This is just a continuing campaign against me by which the real heart of the matter is being disguised,” Babis wrote.

The problem with untaxed one-crown bonds was caused by Miroslav Kalousek (TOP 09), who as finance minister temporarily enabled their issue, and by Sobotka who did not interfere in this practice earlier, Babis said.

Last Friday, Babis released the results of the EY and PWC auditing firms’ reports on his incomes. They confirmed his previous statements that he had the total income of 2.4 billion crowns in 1996-2015, and consequently he could afford to purchase the Agrofert bonds.

However, both firms point out that their reports, available to CTK, do not correspond to an audit based on international auditors’ standards.

On the basis of the reports, some media have expressed doubts whether Babis had at the same time enough finances to buy the shares of the other owners of Agrofert holding and deposit money in the Hartenberg fund.

The TPA analysts told CTK that the auditing firms’ reports had only dealt with Babis’s incomes and not with his expenditures.

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