Top Czech prosecutor reopens billionaire premier’s fraud case

A fraud investigation into whether Czech prime minister Andrej Babis illegally accessed European Union funds must be reopened, the country's top prosecutor has announced, ramping up pressure on the billionaire politician.

Prague prosecutors decided in September not to press criminal charges over the alleged misappropriation of €2 million in European Union cash for the Stork’s Nest farm and conference centre outside the city a decade ago. Mr Babis has always denied hiding his ownership of the operation to allow it to qualify for a small-business subsidy.

Pavel Zeman, the Czech Republic's supreme state prosecutor, said on Wednesday that the allegations against Mr Babis and one associate merited further investigation.

"I expect Andrej Babis to start sorting out his own personal problems so as to put paid to any doubts. That means that until he solves all his personal problems he should not be prime minister," opposition leader Petr Fiala wrote on Twitter.

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Audit

Mr Zeman's decision came as Mr Babis faces intense scrutiny over leaks from a European Commission audit which, according to leading Czech media, has found a conflict of interest between his political role and his business empire.

Mr Babis put his sprawling Agrofert conglomerate into trust funds before taking power in 2017, but the audit reportedly concludes that he is still the ultimate controller and beneficiary of the business, and that millions of euro in subsidies should be repaid.

“The combination of a premier facing criminal prosecution and the current EC audit on conflict of interests . . . is unacceptable,” said Mr Fiala, head of the centre-right Civic Democrats.

"It is serious news that affects the whole political scene. Prime minister Babis should step down to solve his problems and not burden the Czech Republic with them."

Mr Babis insists the audit cannot be considered final until the Czech government has sent Brussels its response to the findings, and he denied that the state would be liable to repay subsidies that some reports put at €17.6 million.

“I fundamentally reject the idea that the Czech Republic would have to return money because of my former company,” he told the Pravo newspaper on Wednesday.

When asked if he would resign over the issue, Mr Babis (65) replied: “There is not the slightest reason.”

Minority government

Mr Babis’s populist Ano party, which opposes immigration and has a strong Eurosceptic streak, leads a minority government that relies on far-right and communist votes in parliament.

The billionaire and his government are also backed by Czech president Milos Zeman (no relation to the supreme state prosecutor), who has vowed to pardon Mr Babis if he were to face any charges.

On the 30th anniversary of Czechoslovakia’s Velvet Revolution last month, more than 200,000 people protested in Prague against Mr Babis and Mr Zeman and the threat they allegedly pose to Czech democracy and rule of law.