Czech finance minister under pressure over EU funding for farm he acquired

Reuters News
Posted: Mar 15, 2016 12:44 PM

PRAGUE(Reuters) - Czech Finance Minister Andrej Babis is under growing pressure to prove he did not flout rules in subsidies for a farm and event center now under investigation by the EU.

The topic will be the subject of an extraordinary parliamentary session next week.

The case is the biggest controversy so far around Babis, finance minister since 2014, the country's most popular politician and a potential candidate for prime minister after an election next year.

Babis, owner of the vast Agrofert chemicals, farming and media group and the founder of the centrist ANO party, denied any wrongdoing in the case involving a 50 million crown ($2.06 million) EU subsidy for the center called Stork Nest Farm.

The opposition and Czech media have voiced suspicions that Stork Nest, which had anonymous owners, was controlled by Babis at the time it received the subsidies. The aid was meant for small and medium-size businesses and big groups like Agrofert would not qualify.

Babis said Agrofert had provided land and credit guarantee for the project but did not take control until acquiring the firm in late 2013, and therefore the subsidies were legitimate.

"On the day the application for subsidy was filed, none of the Agrofert companies owned the Stork Nest Farm," Babis said on Sunday.

In a television documentary released last year, Babis was shown at the farm saying the project was his "best idea" ever, and had also referred to it as "his farm" prior to the 2013 acquisition.

Social Democrat Prime Minister Bohuslav Sobotka said on Tuesday Babis should explain the case and it needed to be thoroughly investigated.

Sobotka said Czech police as well as EU's fraud body OLAF were looking into the 2008 subsidies.

"It is logical to ask for an explanation of this complicated matter," Sobotka said in a live interview on news website "Nobody is preventing Andrej Babis from putting all information on the table... so it stops burdening the functioning of the government."

OLAF said it was conducting an investigation into an Agrofert group company but declined to give the firm's name or any details.

Babis has faced constant criticism that he has widespread conflicts of interest because as a politician and finance minister he also owns two national newspapers and businesses that get public contracts, and national and EU aid.

Opposition parties have called a parliamentary session for March 23 to question Babis over the subsidy.

(Reporting by Robert Muller and Jan Lopatka)