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The European Commission is pretty clear.

Andrej Babiš in trouble? Agrofert in conflict of interest

Kateřina Ostrejšová
06.Nov 2020
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2 minutes to read
Premiér Andrej Babiš.

Prime Minister Andrej Babiš (ANO) is in a conflict of interest, the Senate said in a resolution in October. He thus confirmed the conclusions of the temporary commission, which assessed audits on subsidies for the Agrofert holding company. The upper chamber urged Babiš and the government to resolve the conflict of interest. The Prime Minister and head of the ANO movement have long argued that there is no conflict of interest. He refers to the fact that he met the stricter conditions of the Conflict of Interest Act and in 2017 transferred his businesses to trust funds. But now another legal issue has arisen, which would result in designating Babiš as one of the true owners of Agrofert and other companies. It is a law on the registration of real owners, which specifies the definition of true owners of companies.

Contract without tender

Although the audited public contract was of low value, this does not mean that it is not subject to the rules on the prohibition of conflicts of interest. The supplier of the contract was an entity belonging to the Agrofert holding. In addition, it was awarded directly, without any tender, in 2019. That is, at a time when it was even less clear how to apply the prohibition on conflicts of interest to companies belonging to the Agrofert holding company than is today.

In the UK Commercial Register, Babiš does not appear directly with Agrofert, but as one of the five people controlling one of its subsidiaries. It is specifically Greenchem (Solutions), which falls under the Dutch holding company GreenChem, which Agrofert bought in 2009.

The Prime Minister has so far refused to comment in any way on the data from the British Commercial Register.

The European Commission is clear

From the point of view of the European Commission, the matter is clear. According to them, Prime Minister Andrej Babiš is in a conflict of interest, even with regard to companies in trust funds. This means that, at least in terms of the European share, expenditure on such a contract is ineligible expenditure.

According to the law, a person who owns a share representing at least 25% in a company may not participate in procurement procedures governing public contracts.

Open in gallery (4)
Sídlo firmy Agrofert.
Sídlo firmy Agrofert. Source: profimedia.cz

Luxusní penthaus na Praze 1 - 226m
Luxusní penthaus na Praze 1 - 226m, Praha 1

Advertising for 10,000 CZK

Agrofert purchased advertisements from MAFRA for 10,000 CZK. However, its sole shareholder is the company Agrofert, all shares and the associated voting rights of which were put in Andrej Babiš's trust funds on July 3, 2017. According to the Senate Commission, he did not comply with the requirements of the Czech Conflict of Interest Act and, in particular, the Financial Audit Regulation.

"His position fulfills the nature of a conflict of interest,"

reads the conclusions of the commission, which was presented to the senators by Zdeněk Nytra (ODS).

Open in gallery (4)
Andrej Babiš na tiskové konferenci.
Andrej Babiš na tiskové konferenci. Source: pixabay.com

According to Babiš, everything is in line

The Senate also stated that the current legislation does not allow for an effective resolution of a potential conflict of interest of public officials. Last year's report by the auditors of the European Commission, which concerned subsidies from the EU structural funds, stated that Babiš has a conflict of interest, as he still has an influence in Agrofert. The Prime Minister, on the other hand, points out that Agrofert has been put in a trust funds in accordance with the Czech Conflict of Interest Act.

"Don't ask me that, I won't talk to you about Agrofert,"

Babiš told Radiožurnál. The head of the government did not respond to a specific question about Greenchem and his registration as a person with a decisive influence in the British register, and left without a word.

All of the above, according to the Audit Authority (conclusion of a contract for the performance of a public contract with MAFRA) will be legally invalid in the current situation and expenses ineligible to be reimbursed from the OPZ (Operational Program for Employment) resources.

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