Czech finance ministry files criminal complaint over noughties state debt management

By bne IntelliNews May 19, 2016

The Czech finance ministry has filed a criminal complaint over transactions from 2004, 2005 and 2009 concerning state debt management that it claims may have caused damages in excess of CZK2bn (€74mn), local media reported on May 19.

It is unclear if specific people have been named in the complaint. Finance ministry spokesman Michal Zurovec said an internal audit of the management of the state debt had revealed controversial transactions, CTK reports. Zurovec noted that the Supreme Audit Office (NKU) had arrived at similar conclusions, but declined to release further details of the ongoing investigation.

What is clear is that there is no love lost between current Finance Minister Andrej Babis, founder of the centre-right ANO party, and two of his predecessors who served during the years in question.

Opposition party TOP 09 chairman Miroslav Kalousek, who ran the ministry from 2007-2009 and again in 2010-2013, said in response to the news that Babis is trying to divert attention from his own problems, a thinly-veiled reference to a recent finance ministry audit of his luxury “Stork’s Nest” and ongoing probe by the EU anti-fraud office. Acknowledging that in hindsight it is always possible to point to errors that cost the state money, he said, “I would not dare to speak of deliberate crime.”

However, a larger potential target for Babis would be Prime Minister Bohuslav Sobotka. The head of the coalition leading Social Democrats led the finance ministry from 2002-06. Sobotka, whose cabinet of two-years or so has been accompanied by a backdrop of almost constant sniping with Babis, has not commented. 

According to the NKU report released in March, the Czech state annually paid CZK200mn in interest from state debt related to a questionable 2009 currency swap operation, CTK said, without elaborating. The responsible employees no longer work for the ministry, the audit office said.

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