The opaque brokerage Key Investments — into which nearly Kč 1 billion of public funds has apparently been lost or embezzled — has filed for insolvency and will probably go into liquidation. This does not mean, however, that Key Investments will cease to be a threat to the myriad politicians who profited from deals with the brokerage over the past decade. The potential for blackmail and settling political scores is huge.
The Czech police’s anti-corruption and financial crimes unit ÚOKFK has been investigating criminal complaints relating to the opaque brokerage Key Investments — into which nearly Kč 1 billion of public funds has apparently been lost or embezzled — for more than a year and a half. Finally, some politicians who had a hand in putting taxpayers’ money with the brokerage have been held to account.
E Side Property, which owns the Eden stadium in Prague, home to the Slavia football club, is in trouble — virtually bankrupt and with no money to pay off its debts. It faces insolvency proceedings, bankruptcy or the sale to another investor. In terms of uncovering the murky past of E Side Property, the Czech public would welcome either of the first two scenarios. But more likely, Prague districts will take a bath.
The Key Investments archives are a powerful weapon, both for those with something to lose and something to gain. The web of influence involved in the scandal around the dodgy brokerage goes to the summit of the Czech business-political power axes — and that’s the reason why only one token, and peripheral, culprit has been reeled in so far: former industry and trade minister Martin Kocourek.
The Slovak Poštová banka, controlled by the financial group J&T, is buying up the loans of the chemical plant Spolchemie, the most valuable undertaking of parent company Via Chem Group, from Czech banks. Any transfer of Spolchemie’s property would significantly affect Via Chem Group’s creditors, i.e. Prague 6 and Prague 10, whose blithe politicians set off down the path of risky investment with the dodgy brokerage Key Investments a few years ago.
The battle over the assets of the investment firm Key Investments, through which the administrations of Prague 6, 10 and 13 invested hundreds of millions of crowns, undoubtedly has a number of politicians gripped with fear. The organs of justice have finally begun to take action: in mid-March the Prague 2 district court ordered the confiscation of the assets of the firm Oleochem, Czech Position has learnt.
Exactly a year ago, Czech Position was the first publication to report on the scandal surrounding the Key Investments brokerage, which could be dubbed as the Czech equivalent of the Bernie Madoff case. While the US finance fraudster received a 150-year prison sentence, the main protagonists in the Czech scandal remain free — thanks to the level of morality and expertise in the Czech police and judiciary.
Czech Position has learned that the Center for Economics and Politics (CEP), the think tank founded by President Václav Klaus in 1998 after he stepped down as prime minister, entrusted money to Key Investments, an opaque brokerage under investigation by the central bank — and got most of it back. Meanwhile, two Prague city districts have yet to see huge sums of taxpayers’ money sunk into junk and illiquid bonds returned.
One month ago Martin Kocourek was forced to resign as minister of Industry and Trade after it emerged that through the brokerage Key Investments, bonds worth Kč 16 million were transferred to his mother. Now the daily Mladá fronta dnes says it has documents showing over Kč 8 million passed undeclared through his account with Key Investments when he was an MP in the early 2000’s
Prime Minister Petr Nečas (ODS) on Wednesday evening accepted the resignation of Trade and Industry Minister Martin Kocourek (also ODS), after it came out that he had attempt to hide his assets from his now ex-wife by consolidating them in bonds worth millions, put in his mother’s name — and invested with the dodgy brokerage Key Investments. He could face charges of fraud.