Finance minister faces charges over sale of IPB

There has been a new twist in the case of one of the counrty's largest financial institutions: Investicni a Postovni Banka, or IPB. Heavily indebted, IPB was sold to another large Czech bank, CSOB, in the middle of June just days after being pulled from the brink of collapse by the Central Bank. But Miroslav Kalousek, head of the parliamentary commission set up to investigate the case, has now filed criminal charges against the minister of finance over his role in the affair. Vladimir Tax explains why:

IPB, previously owned by Japan's Nomura Group, was seen by many as a rather murky institution, enjoying considerable influence over large chunks of Czech industry and several influential media organisations, as well as links to senior political circles. No wonder then that the surprise forced administration and subsequent sale of IPB angered some political parties, which ordered the setting up of a parliamentary commission to investigate the case.

Having interrogated the main players, including Czech National Bank Governor

Governor Josef Tosovsky

Josef Tosovsky, Finance Minister Pavel Mertlik, and the managers of both banks involved, the commission produced a report which Parliament voted should remain secret. This move angered the chairman of the commission, the Christian Democrats' Miroslav Kalousek, to such an extent that he made several copies of the report and handed them out to journalists. He then dramatically announced that he had filed charges against the minister of finance, Pavel Mertlik.

Finance Minister Pavel Mertlik

Surprisingly, the accusations are not linked to any of the developments concerning IPB, but rest on claims that Mr Mertlik gave false testimony.

Mr Mertlik, together with Central Bank Governor Josef Tosovsky, played a pivotal role in the sale of IPB. Mr Kalousek claims the Finance Minister lied to the commission when giving testimony. Mertlik's testimony before the commission is allegedly at variance with what he said earlier this year and with several documents which the commission has at its disposal. Kalousek is therefore calling for Mertlik to assume responsibility and step down, suggesting that Mertlik may have tried to cover up other facts, which must be investigated. Minister Merltik, naturally, has rejected all the allegations and says he's ready to go to court to prove his innocence.

The Minister of Finance is one of the most popular ministers in the Social Democrat Cabinet, and also one of the most efficient. Commentators say it's therefore no surprise that the opposition is attempting to discredit him. Many people will also never forgive Mertlik for his role in tearing apart the powerful economic, media and political cobweb surrounding IPB.