The Czech watchdog Office for the Protection of Competition (UOHS) approved Chinese state conglomerate CITIC's takeover of the troubled Czech-based division of Chinese conglomerate CEFC Europe, the Czech News Agency (CTK) reported on June 22.
CTK cited a well-informed source, but a UOHS spokesperson declined to comment. “We have the decision of UOHS, but that’s all that we say for now,” a CEFC Europe spokesman said.
CITIC filed the request through the British Virgin Islands-based company Hengxin Enterprises Limited, UOHS said on June 13.
The move came after Czech and Slovak financial group J&T Finance Group (JTFG) announced it had sold CEFC Europe's outstanding debt of CZK11.5bn (€446.3mn) to Rainbow Wisdom, which is controlled by CITIC, and agreed to return assets it had seized and to call off the crisis management team it had installed.
J&T Private Investments (JTPI), a creditor under JTFG, installed the crisis management team at CEFC Europe on May 17 because the Chinese company had failed to pay back its debt in time.
The UOHS appraisal should concern almost all CEFC assets, but the anti-monopoly office didn’t mention Czech airline Travel Service, in which CEFC holds 49.9%, Reuters reported.
CEFC Europe assets in Czechia include the brewery Lobkowicz, first division football club Slavia Prague, and hotels and office buildings. Its investment drive was promoted by Czech President Milos Zeman and his inner circle, keen to deal with Beijing.
The implosion of CEFC Europe has raised concerns over how stable and beneficial Chinese investments are for Czechia and whether they are merely a political tool to increase Chinese influence in Czechia.
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