EU queries Czech PM’s moves to tackle conflicts of interest

PRAGUE, May 26 (Reuters) – The European Commission has asked the Czech government for information on arrangements designed to prevent conflicts of interest over EU subsidies linked to companies in the business empire of Prime Minister Andrej Babis, a Commission spokesperson said on Tuesday.

Czech Radio’s iRozhlas.cz and Czech news site Seznam Zpravy earlier reported the Commission was seeking further analysis of a plan to shift Babis’ shares in Czech conglomerate Agrofert into a special trust.    

The Commission’s Directorate-General for Regional and Urban Policy also wants assurances that companies linked to Babis but outside the trust – including an investment fund operating dozens of fertility clinics across Europe – are not receiving EU funds, according to iRozhlas.cz.

Babis told Czech news agency CTK he had fulfilled laws.

“I resolved the alleged conflict of interest far beyond the scope of Czech and European laws,” he was cited as saying.

“I do not own Agrofert and I will not get my shares back until the end of my life, I do not benefit from it either, and this will apply even when I am no longer in politics.”

A Commission spokesperson told a briefing that a letter had been sent on May 20, without providing further details.

“We are in contact with the Czech authorities to seek information on what measures are in place to avoid the conflict of interest,” the spokesperson said, adding there were regular controls to protect EU financial interests.

‘STILL NEED TO BE CLARIFIED’

Seznam Zpravy reported the Commission advised Czech authorities not to seek reimbursement from the EU budget for any subsidy payments to the businesses concerned until the issue is resolved. The Commission spokesperson declined to comment.

The government office and development ministry did not respond to questions.

Billionaire Babis controls a vast company in food, agriculture and chemicals that has received hundreds of millions of euros in EU farm and other subsidies. Czech courts and EU institutions previously ruled that Babis was in a conflict of interest when he was prime minister from 2017 to 2021.

Before returning to office, Babis said in December he would move Agrofert into an independently governed trust.

Some Czech authorities have ruled the trust structure complies with regulations. A Czech ministry sent a letter to the Commission in March outlining its position.

The response fell short, according to the latest letter sent by Hugo Sobral, a deputy director-general at the Commission, who wrote “some matters still need to be clarified”, according to iRozhlas.cz.

Any EU refusal to reimburse subsidies would leave costs to be covered by the Czech state budget.

(Reporting by Jason Hovet, additional reporting by Jan Lopatka in Prague and Inti Landauro in Brussels; Editing by Mark Potter and Gus Trompiz)