Until recently, he was described as a financial shark, a successful investor, a tough player and a billionaire. Today, Pavol Krupa is a man in trouble. His company Arca Investments – although Krupa claims today that he has nothing to do with it – went bankrupt and became the biggest bankruptcy since the 1990s, since the fall of the IPB bank.
Arca ended up in insolvency with a debt of almost CZK 19 billion (€740m) and two thousand creditors. Krupa himself claims that he has receivables from his former company worth hundreds of millions of CZK, while today’s Arca, on the contrary, describes him as a debtor. In addition to Arca, Krupa’s mission to discredit financier Zdenek Bakala, in which he was strongly supported by Czech President Milos Zeman, also turned into a disaster.
Czech President Milos Zeman repeatedly calls Zdenek Bakala a tunneller, says he should lose his billions and reiterates that he should end up behind bars. In 2018, when gave the Slovak businessman the Medal of Merit of the First Degree, it was clear what it was for: The open fight against Bakala and for criticism of his work in the mining company OKD.
However, the fact that Krupa, through (then still his own) Arca Capital Bohemia, financially supported the Zeman Party of Citizens’ Rights with a sum of CZK 300 thousand (€12k) certainly played a role. The union with the president was to be confirmed by becoming neighbours in the village of Myslin in Central Bohemia. Zeman already chose a piece of land there. Just a short walk from the house where the “Slovak shark” lives. But it was allegedly just a coincidence.
In the end, the investment did not take place. Zeman should spend his post-presidential life in a bungalow in Lany, built on land that was provided to him under favourable conditions by his Chancellor Vratislav Mynar – but that is a different story. As for Krupa’s fight against Bakala, which was supported by the President, the results are bad.
Financial compensation as an educational tool
The memory of September 20, 2021 will probably not be one of the best in the life of Pavol Krupa. At that time, a U.S. federal court in South Carolina ordered him to pay Bakala $32,406,146 in damages for a five-year extortion campaign. It is very serious, because the decision can be enforced on the basis of international agreements even outside the US jurisdiction. Whether Krupa would have the means to pay a similar amount in his current situation is uncertain.
Unconfirmed speculation therefore also suggests that Krupa might try to offer some form of compensation, such as disclosing all the circumstances of the pressure on Bakala, including whether some top politicians were actively involved.
U.S. Judge David C. Norton described Krupa’s tactics against Bakala and his family as “extreme, outrageous, and reprehensible. Such high compensation should be an educational tool for Pavol Krupa and his affiliates,” the judge said. His decision came just a month after the same court ruled that Krupa was guilty of organizing actions against Bakala to harm his reputation while demanding $23 million to end the pressure.
Hired protesters went to protest in front of the Bakala’s house in Hilton Head in the US state of South Carolina. Bakala therefore filed a criminal complaint against Krupa and also against the owner of Crowds on Demand, Adam Swart, in 2018. But Swart came up with an amicable settlement of the dispute and provided the court with a full confession, including evidence of extensive communication and commands from Mr. Krupa. The documents show that in 2018 and 2019, Swart collected almost $1.5m from Krupa’s companies.
Tunnelling did not take place
Pavol Krupa first hired a large American law firm to defend him, only to cancel the deal after a while. He subsequently told the court that he would defend himself. Eventually, he stopped communicating with the court.
In addition to events in the United States, Krupa also campaigned against Bakala in the Czech Republic. His then company Arca Capital filed a criminal complaint for alleged OKD tunnelling. However, after five years of investigation by the National Centre against Organized Crime, the announcement was postponed this spring, stating that the crime did not happen.
This article first appeaered on Forum Weekly.