Business News

Prague court dismisses CSOB's complaint against Japanese bank Nomura. Wireless internet in Prague awaits EU decision. Komercni banka's owner to expand into Slovakia. Czech market attracts more foreigners. Prague 13th most favorable European location for business.

Prague court dismisses CSOB's complaint against Japanese bank Nomura

On Thursday, a municipal court in Prague rejected a claim for 24 billion Czech crowns ($1 billion US) filed by the Czech bank CSOB, against the Japanese bank Nomura. This most recent case concerns a conflict over Ceske pivo (Czech Beer), centered around share transactions of Plzensky Prazdroj dating between 1998 - 2000. When Nomura sold Plzensky Prazdroj to South African Breweries for 22 billion crowns ($989 million US), CSOB claimed that the sale was made with transactions covered by IPB shares—which later became worthless—rather than in cash. Nomura denied the accusations and stated that it had paid for the shares of the breweries. Thursday's ruling is Nomura's third important legal victory against the former IPB bank this year. In March, an artbitration ruling decided that the Czech Republic owes Nomura 40 billion Czech crowns ($1.8 billion US), and in September the Swiss Federal Supreme Court turned down the Czech Republic's appeal of the March verdict.

Wireless internet in Prague awaits EU decision

A plan by Prague City Hall to provide free wireless Internet service throughout the capital city is facing stumbling blocks thanks to telecommunications providers who have filed a complaint with the European Commission. Telecommunications companies operating in the Czech Republic are taking a united stand against City Hall, arguing that Internet services are a major source of revenue, and the free Wi-Fi plan will eliminate their customer base. Back in August the Anti-Monopoly Office ruled that the city's project does not violate fair market conditions, but telecommunications companies now await the EC to address the issue in October. In May the city of Prague secured 37.3 million crowns ($1.7 million US) from EU Structural Funds towards the 89 million crown project, which is heavily reliant on EU funding. If approved, City Hall's project could provide over one million people with free Internet access. Free Wi-Fi is now widely available in Prague 5, and new to parts of Prague 8 and 13 as of last month. Mayor Pavel Bem remains optimistic that the EU will approve his plan to service all of Prague's districts.

Komercni banka's owner to expand into Slovakia

The French bank Societe Generale, which controls Czech Komercni banka, is set to expand into neighbouring Slovakia. Reports on the on-line server Aktualne.cz and its Slovak version, Aktualne.sk, cite two independent sources claiming that that Societe Generale is planning to buy shares in Slovakia's Vseobecna uverova banka (VUB). An Italian group, Intesa, bought VUB in 2001 after the Slovak government bailed the bank out of financial troubles, and VUB has been the most profitable bank in Slovakia for the past three years running. In 2005 it registered a profit of over 3.8 billion Slovak crowns ($130 million US). Niether Societe Generale, VUB, nor Intesa have confirmed the reported sale.

Czech market attracts more foreigners

Photo: European Commission

On Thursday, the Czech Ministry of Labour and Social Affairs released figures showing the number of people from European Union countries working in the Czech Republic has been increasing since May 2004, when the country joined the EU. In late 2005 there were over 93 000 people from across the EU working in the Czech Republic. Citizens of neighbouring Slovakia make up the largest number of foreign workers: they numbered more than 75 000 in late 2005, and over 3200 additional Slovaks arrived to work in the Czech Republic during the first half of 2006. Polish citizens comprise the second largest contingent, with 12 600 Poles working on the Czech market at the end of 2005. The report also confirms that foreign white-collar workers in the Czech Republic tend to come from the old EU member countries, while the newer states are the source for the blue-collar market. Czechs still face restrictions in some western EU markets, but may work without permits in the United Kingdom, Ireland, Sweden, Italy, Portugal, Greece, Spain, and Finland.

Prague 13th most favorable European location for business

Data from a new study conducted by the international real estate firm Cushman & Wakefield, lists Prague as the 13th most favored European city in which to establish business offices. The European Cities Monitor (ECM) shows Prague as being more popular than its central European counterparts, with Warsaw coming in 18th, Budapest 22nd. Both Moscow and Vienna also finished behind Prague. London came in first, with Paris being a close second. A spokesman from Cushman & Wakefield explained Prague's success as rooted in its geographic location, as well as business costs and the standard of living. The city ratings are based on the preferred locations of Europe's 507 leading companies.