President Milos Zeman defended the privatization of the Mostecke uhelne Spolecnosti mining company (MUS), which his government approved in 1999, in his testimony today. According to Zeman, MUS was not a strategic company and the government was happy to get rid of the minority stake. The prosecution claims that the MUS managers cheated the state during the sale because Zeman’s cabinet did not know that they would be the real acquirer of the company’s shares.
Zeman testified at the Prague City Court via video conference. As the defendants’ lawyers asked him their questions, a man broke into the courtroom and interrupted the interrogation. He wanted the president to stand up for his abandoned children and shout. The judge urged him several times in vain to leave. Eventually, he was brought out by a judicial guard. Zeman did not respond to the man, and after the judge apologized for the interruption he continued his testimony.
Later, Zeman rejected the court’s offer for a break. However, while playing an audio recording of the relevant government meeting, he lit a cigarette and smoked for the rest of the interrogation with the permission of the President of the Judicial Chamber. His testimony lasted almost three hours.
Zeman’s Social Democratic government approved the sale of a 46 percent stake in MUS to Investenergy unanimously, for 650 million crowns. According to the public prosecutor, the managers cheated the state by at least 3.2 billion crowns and paid for the shares with money from MUS, which they secretly controlled.
“The offer submitted was the only one and the offered price was higher than the price of MUS shares on the stock exchange,” Zeman summed up the circumstances of the vote. “The reason for the sale was very simple: once the state did not have a majority in the company, there was a danger that it could be overruled at the general meeting at any time, etc. For this reason, it was far better to privatize the minority stake,” he explained.
“In terms of the information we had, it was the right, profitable decision with a 20% profit margin. (…) The state could keep the share, but it would be completely useless to him. Of course, he did not want to keep it. what would he be to him? ” Zeman continued.
“In my opinion, MUS has never been a strategic company, it was simply one of the coal mining companies,” the president said. “The government decided unanimously – it means that none of the members had any doubts. The privatization of the banking sector used to be much more complicated and demanding, but this was not the case;” he said.
He also said that he does not remember the details because his government dealt with several privatization cases. “My government was a little more restrained compared to the previous government when almost everything was privatized,” he said.
According to him, Zeman did not know who was behind Investenergy and the affiliated Appian Group. “I couldn’t even know. The government is not a detective agency,” he said. “None of us had a fundamental reason to look at the details in that company. We were happy to get rid of her because there was a minority stake. And nothing more, “he continued.
When asked by Judge Zeman, he replied that he had no information that the purchase of MUS shares would take place from the company’s funds. Prosecutor Radek Bartoš pointed out that Zeman had previously told the police that if the money came from MUS, he would file a criminal complaint. The President has stated that he insists on this previous statement and sees it as no contradiction with his current position.
“I consider it extremely unlikely, but not out of the question, that MUS managers have controlled the Appian Group. If I knew that the money came from crime, of course, it would be a different song. In this case, it is a crime, “he added.
Defendants Antonio Koláček, Marek Čmejla, Jiří Diviš, and Oldřich Klimecký defend themselves by saying that the government knew to whom it was selling the share, or that it did not care because the state wanted to get rid of its share in MUS.
Koláček and Diviš today thanked Zeman for his statement. According to them, she supported their version. “I would also like to thank the decision of your government at that time – it enabled the consolidation of shares, a very rapid restructuring. You also helped us during the crisis actions, when miners’ strikes in the mines took place,” Koláček told Zeman. “Thank you for the very important information and confirmation of a lot of the statements that we make here,” Diviš added. “I fully understand that there was only one option for the government in this situation – sale. The criminalization of this business transaction, which has been going on for 20 years, is not entirely appropriate,” he stressed.
The court also wanted to hear former Minister of Defense Vladimír Vetchý from a distance in front of Zeman. After a few minutes, however, the call from Brno was interrupted due to a power failure of one of the central video-conferencing servers operated by the Ministry of Justice. It was not even clear whether the court would be able to unite with the Castle. In the past, the court had to cancel two interrogation dates agreed with Zeman due to the coronavirus situation. The video call was eventually made via the skype backup platform.
Several ministers of Zeman’s cabinet have already testified at the Prague City Court. For example, former Minister of Industry Miroslav Grégr, who pushed for the direct sale of the state share instead of the competition, stated that he did not know about the connection between Investenergy and the accused managers. However, he admitted that it was no secret in the corridors that MUS’s management sought exclusive ownership of the company.