Prague/Strasbourg, July 16 (CTK) – Prime Minister Andrej Babis (ANO) will have to prove that he does not dominate the trust fund to which he transferred his holding Agrofert due to the latest rules for the conflict of interest, the European parliament passed in early July, the server Neovlivni.cz said on Monday.
Under the new rules, senior politicians must not be receiving EU subsidies, the server said.
If Babis does not prove that he does not dominate the holding, he will either have to give up his posts or the firm will lose the subsidies, it added.
Agrofert is the biggest producer in the Czech agriculture and food industry and a major recipient of state subsidies.
Agrofert spokesman Karel Hanzelka said the new rules should not affect Agrofert because Babis is neither the owner of the trust funds nor a person in control of them.
“We would also like to emphasise that we receive the same subsidies as all other farmers in the EU – for a cow, for one hectare etc,” Hanzelka said on behalf of the holding, adding that the subsidies bring no profit to Agrofert but only cover a part of its expenditures.
According to the Czech Civil Code, the contents of a trust fund is owned by neither its administrator, nor its founder nor the person who receives money or other yields from it.
The EP-approved financial rules reckon with the ban on the conflict of interests relating not only to the officials who directly decide on the payment of the European subsidies, but also to all national bodies on all levels and the persons working in them. This includes the prime minister and the government members directly responsible for the payment of EU subsidies.
The new measures were prepared by Ingeborg Graessle, the head of the European Parliament committee for budgetary control. In the past, she criticised Babis, when he was the finance minister and Agrofert owner, for a serious conflict of interests.
Graessle said it was inadmissible for members of a government, who are guarantors for the appropriate use of EU funds, to benefit from the funds themselves and even to be able to influence the distribution and use of money from the funds.
It is important to take into account that it will be Czech taxpayers who will pay for the failure to observe the public procurement rules and other directives, she added.
Babis has repeatedly said she disliked the Czech Republic and that he was the aim of a targeted campaign.
“Under the new European budget rules, a European or Czech politician or official who can directly or indirectly influence the drawing of European subsidies or influence the companies which draw the subsidies will be in the banned conflict of interests,” Neovlivni.cz wrote.
If a conflict of interests occurs, the relevant politicians or officials will either have to step down or sell their shares in the company which gets the EU subsidies. Or else, they may have committed a criminal act, which is, e.g., the harm to EU financial interests.
Babis is facing criminal charges over an EU subsidy fraud in his Capi hnizdo centre.
Until 2007, the Farma Capi hnizdo company belonged to Babis’s Agrofert Holding. Afterwards, its stake was transferred to bearer shares for a small firm to gain a 50-million-crown EU subsidy, which a firm of the huge Agrofert Holding could never get. It observed this condition for a few years, but later it again returned to Babis’s concern.
Now Capi hnizdo is owned by the company Imoba, which returned the controversial subsidy to the state a few weeks ago.