Three Trade Ministry Officials Charged In Kc4.5 Billion Fraud Case

Corruption, Czech Industry and Trade Ministry

Prague, May 24 (CTK) – The High State Attorney’s Office charged three Industry and Trade Ministry officials with causing 4.5-billion-crown damage due to an agreement between the ministry and the Czech-Moravian Guarantee and development Bank (CMZRB), state attorney Ondrej Trcka told CTK today.


The agreement dealt with the creation of a guarantee fund within the Business and Innovation 2007-2013 Operational Programme.


According to the state attorney’s office, the three officials committed breach of trust and harmed the financial interests of the EU. They caused damage over 2.7 billion crowns to the Czech Republic and another 1.8-billion damage to the EU through unauthorised use of money from the EU’s regional development fund.


The CMZRB provided the business guarantees in 2007-2010. The Czech Republic then owned two thirds in the CMZRB. It used 5.7 billion crowns from the Guarantee and Progress programmes of the EU’s Business and Innovation Operational Programme to pay out guarantees.


However, the CMZRB received the money without a tender, despite the fact that one third of its shares was the property of two private banks: Ceska sporitelna and Komercni banka. These banks most frequently provided the guaranteed loans.


A 2011 Brussels report described the mistakes in the provision of the guarantees. After three years of negotiations, the state accepted a fine worth 1.83 billion crowns in relation to the Guarantee programme.


Detectives from the National Centre against Organised Crime (NCOZ) launched the prosecution of the ministry officials in September 2016.