Prague, May 7 (CTK) – Czech Finance Minister Andrej Babis (ANO) released today his answers to 22 questions the senior ruling Social Democrats (CSSD) recently asked him about his controversial business deals, but he did not give direct answers to many of them.
For example, he repeated that the legitimacy of the transactions whose yields he used to buy untaxed one-crown bonds, an operation the critics suspect of tax evasion, have been confirmed by audit firms.
Previously, the two auditors, EY and PWC, confirmed that Babis had enough money to buy the bonds, but they emphasised that their enquiry into Babis’s finance cannot be taken for an audit corresponding to international audit standards.
“An audit firm can make a genuine audit only in the case of corporations and the self-employed, but not individuals who do not do any bookkeeping,” ANO spokeswoman Lucie Kubovicova explained to media today.
Babis has been finance minister since early 2014. The CSSD recently called his further presence in the centre-left coalition cabinet unacceptable due to his failure to explain his suspicious business deals. On Friday, PM and CSSD leader Bohuslav Sobotka proposed to President Milos Zeman to dismiss Babis.
Babis owned a giant chemical, food, agriculture and media Agrofert Holding for many years until February when he transferred it to trust funds in compliance with the conflict of interest law.
In a list of questions from April 28, the CSSD asked Babis questions such as how he gained money for the purchase of one-crown bonds worth 1.5 billion crowns in 2013, whether the Financial Administration (FS), a body controlled by the Finance Ministry, will check the purchase to rule out tax evasion and how Babis acquired Agrofert in the past.
In his answers released on ANO’s website today, Babis wrote that the CSSD’s questions are absurd and based on lies.
To explain why he bought one-crown bonds from Agrofert, his own firm, which still secure untaxed revenues for him, he wrote that their purchase was his loan to Agrofert, which was more advantageous for the company than a bank loan.
However, it ensues from the EY and PWC reports, that almost half of Babis’s 1.8-billion-crown incomes before 2013 was his profit from the sale of his Profrost, Afeed and Afeed CZ companies’ shares to Agrofert for 748 million crowns.
As a result, a part of his “loan to Agrofert” was in fact money gained from Agrofert.
In response to the CSSD’s question concerning the checks of possible tax evasion related to untaxed one-crown bonds, Babis wrote that the Financial Administration (FS) has pledged to check all operations involving such bonds.
FS director Martin Janecek, however, told media previously that he does not know based on which law the FS should act in this respect.
In his answers, Babis omitted the information about a foreign owner of Imoba, a firm he owned in the past.
In its questions, the CSSD reproached Babis for asserting that his firms are not based in tax havens, while his Imoba was seated in Switzerland, a tax haven, for many years.
“Since its establishment, the IMOBA a.s. company has had its seat in Prague, the Czech Republic,” Babis wrote in response.
True, Imoba has had a seat in Prague but according to the register of companies, it was owned by the Swiss firm Fertagra for several years in the past.
“Switzerland is no tax haven. Taxes have been duly paid there,” Kubovicova said today.
Babis did not directly answer the CSSD’s question of how he gained money for the purchase of a stake in Agrofert, a company worth some four billion crowns at the time, 17 years ago.
“I bought the shares for the market price, i.e. the price for which the shareholders were willing to sell them,” Babis wrote.
“Andrej Babis gained money for the purchase of Agrofert from his incomes before 1996,” said Kubovicova.
However, information about Babis’s incomes before 1996 appeared neither in his answers to the CSSD’s questions nor the reports released by the EY and PWC auditors.