Babiš’ intervention in ČEZ upsets coalition parties

Andrej Babiš, photo: CTK

An intervention by Finance Minister Andrej Babiš in the Czech state-run energy giant ČEZ has annoyed his party’s coalition partners. Mr Babiš’s ministry has replaced seven out of eight members of ČEZ’s supervisory board, ignoring informal but well-established rules about sharing board seats with other parties in the cabinet. The conflict over the control of the Czech Republic’s most important state corporation could destabilize the country’s centre-left government.

Andrej Babiš,  photo: CTK
In a sweeping and surprise move, Finance Minister Andrej Babiš has appointed his nominees to the boards of four state-run companies: the aviation group Czech Aeroholding, the oil pipeline company Mero, the fuel distributor Čepro, and the energy utility ČEZ.

Seven out of eight members of the firm’s supervisory board were replaced; among the newly appointed officials is deputy finance minister Lukáš Wagenknecht.

“One of the major tasks of this government and the finance ministry is to have such people on these firm’s supervisory boards who will actively supervise and control the companies. Another important thing is that all new members are approved by the government’s nomination committee as agreed by the coalition parties.”

Lukáš Wagenknecht,  photo: Šárka Ševčíková
But the appointments have upset ANO’s partners in the government. Mr Babiš minister apparently took advantage of the fact that none of the other parties’ candidates had been pre-approved by the cabinet, and instead had his own people elected at Friday’s general meeting of the firm.

Commentator Erik Best says it is difficult to establish the exact motivation behind Andrej Babiš’ action.

“The question is whether Mr Babiš wants to instil new practices at ČEZ and wants to turn it into a better operating company, which could be very positive, or whether he wants to use his influence as a businessman to enter into negotiations with other high-level businessmen and become more of a power-broker on the national level.”

The daily Mladá fronta Dnes reports that Prime Minister and Social Democrat chair Bohuslav Sobotka approved the move in return for his party’s nominee, former head of the Czech Academy of Sciences Václav Pačes, being appointed chairman of ČEZ supervisory board.

However, Mr Sobotka’s approval of the move could weaken his own standing with fellow Social Democrats as some of Mr Sobotka’s party rivals believe the prime minister is consistently conceding to the opportunistic and powerful Andrej Babiš.

Photo: Filip Jandourek
The decision also deeply annoyed the smallest coalition party, the Christian Democrats. The paper on Monday quoted Christian Democrat leader Pavel Bělobrádek as saying it is unusual for ČEZ’s supervisory board to be controlled by nominees of one political party; another Christian Democrat official said they would demand an explanation from their coalition partners at a meeting of the three parties’ leadership scheduled for Wednesday.