EU Seeks Clarity on Czech PM Babis' Handling of Conflict of Interest and Subsidies
European Commission Requests Further Information from Czech Government
PRAGUE, May 26 (Reuters) - The European Commission has asked the Czech government for more information on arrangements designed to prevent conflicts of interest over EU subsidies linked to companies in the business empire of Prime Minister Andrej Babis, Czech media reported.
Commission's Inquiry into Agrofert Trust Structure
Czech Radio's iRozhlas.cz and news site Seznam Zpravy said late on Monday the Commission was seeking further legal analysis of a plan to shift Babis' shares in Czech conglomerate Agrofert into a special trust.
Concerns Over Companies Outside the Trust
According to iRozhlas.cz, the Commission's Directorate-General for Regional and Urban Policy also wants assurances that companies linked to Babis but held outside the trust - including an investment fund operating dozens of fertility clinics across Europe and firms in other sectors - are not receiving EU funds.
Advice on Subsidy Reimbursement
The Commission advised the Czech authorities not to seek reimbursement from the EU budget for any subsidy payments to the businesses concerned until the issue is resolved, the report said.
Babis' Business Empire and Previous Conflict of Interest Rulings
Billionaire Babis controls a vast business empire that has received hundreds of millions of euros in EU farm and other subsidies over the years. Czech courts and EU institutions previously ruled that Babis was in a conflict of interest when prime minister from 2017 to 2021.
Steps Taken to Address Conflict of Interest
Before returning to office, Babis said in December he would move Agrofert into an independently governed trust to comply with conflict-of-interest rules.
Regulatory Compliance and Czech Authorities' Position
Some Czech authorities have since ruled the trust structure complies with regulations and that companies held within it should remain eligible for public aid. A Czech ministry sent a letter to the Commission in late March outlining its position.
Commission's Continued Concerns
However, the response fell short, according to a letter sent last week by Hugo Sobral, deputy director-general at the Commission department. "Some matters still need to be clarified," Sobral wrote, according to iRozhlas.cz.
Potential Financial Implications and Agrofert's Scope
The government office, the Development Ministry and the European Commission did not immediately respond to questions.
Any EU refusal to reimburse subsidies would leave costs to be covered by the Czech state budget.
Overview of Agrofert's Business Operations
Agrofert comprises about 230 companies across central Europe, spanning fertilisers, plastics, biofuels, farming, food processing and retail. It employs nearly 30,000 people.
(Reporting by Jason Hovet, additional reporting by Jan Lopatka in Prague and Inti Landauro in Brussels. Editing by Mark Potter)
