A Prague court has delivered verdicts concerning one of the most controversial sell-offs of state assets in modern Czech history. But the marathon court case will certainly not draw much of a line under the arguments.
A more than two-and-a-half year court marathon ended in Prague on Monday when verdicts were given on three individuals charged with selling for a fraction of their value the remaining state shares in hard coal mining company OKD in 2004.
Facing charges were the valuation expert Rudolf Doucha and two represenstives of the state’s National Property Fund, Pavel Kuta and Jan Škurek. According to the prosecution, they combined to undervalue the state’s assets to the tune of 5.7 billion crowns when Karbon Invest bought the mining company outright for 4.1 billion crowns.
The court threw out the charges saying it has not been proved that criminal actions had taken place. But while the three walked free the ongoing arguments over OKD touching on the reputations of many top politicians and businessmen are set to continue. Czech Radio journalist Jana Klímová outlined how problems surrounding the massive hard coal firm began in fact much earlier than 2004:
ʺIt’s possible to say that it was in 1996 under the government of Václav Klaus and his Civic Democrat led coalition government. At a general meeting of OKD it was agreed that the state, unlike private investors, would reduce its basic capital stake in the firm and the money would be used to pay for some of the closures of shafts at the mine. The state also offloaded some of the share that it held through the Restitution Investment Fund and some local councils sold up their shares in OKD because they wanted the money for other developments. The result was that the state became a minority shareholder with a 46 percent share. The 48 percent on the open market was bought by an Ostrava based company Prosper Trading.ʺ
Effectively at OKD a sadly familiar story was playing out in the Czech Republic where valuable state assets were involved. The state had painted itself into a corner where it was left without much of an option to sell up the rest of the company under highly disadvantageous conditions.
Soon afterwards the privately held shares were acquired by Karbon Invest, the company of well known businessman Viktor Koláček. He sidelined the state representatives in the company with Karbon Invest taking all day to day operational decisions and the more long term strategic ones. The government of Miloš Zeman took no real steps to recoup the situation and neither did that of fellow Social Democrat Vladimir Špidla.
And it was under his successor as prime minister, Stanislav Gross, that the final OKD privatisation decision was taken. The finance minister at the time piloting the sale was Bohuslav Sobotka, later to be prime minister.
Within months winning outright ownership, Karbon Invest sold up to RPG Industries, the investment company of Czech businessman Zdeňek Bakala. Much of the ensuring and ongoing controversy over OKD has largely focused on how much to blame Sobotka and Bakala were.