A legal analysis received by Czech Position suggests a Swiss verdict over MUS (renamed Czech Coal) could rob Pavel Tykač of the company
A little more than a week ago, Czech media were filled with speculation that billions of crowns connected with the privatization of Czech mining company Mostecké uhelné společnosti (MUS) — and currently frozen in Swiss bank accounts —might be returned to MUS’ successor, Czech Coal.
Under this scenario, the cash originally belonging to the Czech state could land up in the pockets of Czech Coal’s owner, billionaire businessman Pavel Tykač, if the six Czech managers and one Belgian subject to criminal proceedings in Swiss courts are found guilty.
The six Czechs charged are believed to be Antonín Koláček, Luboš Měkota, Marek Čmejla, Oldřich Klimecký, Petr Kraus and Jiří Diviš; the Belgian is probably Jacques de Groote, a former top manager with the International Monetary Fund (IMF) and a top member of Appian Group, which went on to own MUS.
Czech Position has now though received a legal analysis of the case that shows the possible winner from a guilty verdict in a totally different light. According to this analysis, the alleged fraud at the center of the takeover of MUS by its former managers could result in the return of its property, now held by Czech Coal and Tykač, to the Czech state.
The origin and authenticity of the material suggesting this scenario was sent to Czech Position from the e-mail account Tykac.MUS@seznam.cz. Its veracity has been impossible to check, but given the seriousness of the case and broad implications, this publication has nontheless decided to make it public.
The analysis (which in its introduction declares that it “is based on laws in force now and in the recent past and criminal law applicable in the future) deals with the possible consequences if the Swiss prosecutor’s charges over MUS are proved.” The charges cover fraud, money laundering and forgery.‘The fact that these borrowings or loans were later repaid does not change anything fundamentally.’
As a result, the purchase of MUS by Appian Group might be deemed illegal. The grounds for that could be the suspected illegal use by MUS managers of the company’s own funds to buy shares, something which is prohibited in the commercial code. “The fact that these borrowings or loans were later repaid does not change anything fundamentally,” the material adds. What’s more, the MUS managers apparently dipped into funds that had been earmarked for mining reclamation works, breaking mining laws.
The analysis also sets out the specific criminal acts that might have been committed during the takeover of the mining company and the possible punishments which could result from criminal convictions. They are set out as follows:
The criminal act of serious violation of business relations (who deliberately act to appropriate unjustified gains for individual benefit or for a third party which seriously infringes established rules for business relations set out by generally binding legal regulations.) Punishment of up to five years in prison.
Abuse of information for commercial benefit (who as a worker, member of an organ, associate, businessman or entrepreneur in a business , or two or more businesses or organizations with a similar activity plans actions outlined in paragraph 1 and closes or tries to close agreements at the expense of one or more of them). Punishment of up to 12 years in prison (in the case of benefits to the guilty party valued at more than Kč). In the new criminal code the penalty is reduced to a maximum of 10 years in prison.
The criminal act of abusing responsibilities related to third party property (who causes damage to others, no matter how small, by legally violating contractually imposed obligations to care or manage others’ property.) Punishment of up to eight years in prison, practically unchanged in the new criminal code.
The criminal act of threatening to damage or damaging the environment (who deliberately causes damage to the environment and exacerbates or impedes its restitution or amelioration.) Punishment of up to three years in prison.
The consequences for the parties if found guilty would be: imprisonment; the possibility of requesting that transactions in question are declared invalid, allowing claims for return of property by the original owners; penalties of forfeiture of goods and confiscation of property, with goods and other property covered by forfeiture becoming the property of the state; the possibility of protective measures being taken with regards to goods or property.
The possibilities of how the case being brought by the Swiss Federal Prosecutor in Bellinzone will turn out in practice are multiple. Proceedings should start at the earliest next year with no target date for their conclusion.