Pandora Papers: Czech PM Babiš used offshore companies to buy USD 22 million French estate
Czech Prime Minister Andrej Babiš has come under fire following the publication of the global investigation into the Pandora Papers which claims that he moved USD 22 million through offshore companies to buy an estate on the French Riviera, while keeping his ownership secret. Mr Babiš has since lashed back, stating that the accusations are timed to damage his party’s chances in the upcoming lower-house elections.
Czech Prime Minister Andrej Babiš accused Czech journalists of a conspiracy in a heated Sunday election debate on the TV station CNN Prima News after being confronted with the recently published results of an investigation into the Pandora Papers documents, which suggest that he was involved in potentially shady offshore transactions.
According to the Czech investigative journalist team Investigace.cz, which took part in the global effort to analyse nearly 12 million documents connected to the Pandora Papers affair, Mr Babiš injected USD 22 million into his British Virgin Islands (BVI) based company Blakey Finance in 2009.
The funds were then transferred through another of Mr Babiš’s companies in the United States to its Monaco subsidiary SCP Biguard via a so-called back-to-back loan “directly for the final purpose of financing the Real Estate’s acquisition”, according to a report on the website of the International Consortium of Investigative Journalists (ICIJ).
The Czech prime minister, who at the time was not yet involved in politics, also appears in a mortgage document as SCP Bigaud’s ‘company manager’, the ICIJ writes. None of the companies, the latest of which was closed last year, were ever mentioned in Mr Babiš’s asset declarations, according to Investigace.cz.
This money was ultimately used for purchasing 16 properties dispersed over more than 3 hectares in Mougins in Southern France, according to Investigace.cz. Among them the two-story villa Chateau Bigaud, from which Mr Babiš and his wife Monica posted several photographs on social media.
According to experts consulted by the ICIJ and its partners, the financial structure ー a series of shell companies in the BVI, Washington D.C., and Monaco ー potentially reduces the property owner’s tax burden on capital gains.
Kamil Kouba, a former Czech Police officer who has since co-founded the international anti-money laundering police experts network – AMON, gave his thoughts on the results of the investigation to Investigace.cz.
“The scheme of this transaction carries the marks of money laundering. No normal trade transaction would look like this.”
Asked about the allegations during the debate on CNN Prima News, Prime Minister Babiš said he did nothing illegal and accused Investigace.cz of timing the release of the investigation just before the elections.
Investigace.cz has since released a statement highlighting that the Pandora Papers investigation involved hundreds of journalists from around the world who all had to follow the same global deadline.
On Monday, Jaroslav Ibehej, the spokesman for the Ministry of Interior’s National Centre against Organized Crime (NCOZ), told Czech Radio that his department will be looking into the information related to all Czechs, including Mr Babiš, who are mentioned in the Pandora Papers affair.
The Czech prime minister is already being criminally prosecuted by the Czech police for potential EU subsidy fraud in a case known as the Stork’s Nest Affair. European Commission auditors also found him to be in a conflict of interest due to his role as Czech head of government while simultaneously controlling Agrofert - the business empire he founded - through trust funds. However, the auditors’ conclusion is still contested by Czech official organs and Mr Babiš continues to state that he is innocent in both cases.
