The Municipal Court in Prague has found former Czech and Moravian Football Association (ČMFS) chairman František Chvalovský and four former colleagues guilty of defrauding Komerční banka of Kč 1.5 billion and sentenced him to 10 years in prison on Tuesday. According to the state prosecutor, Chvalovský and former associates secured loans from the French-owned retail bank in the late 1990s on the basis of false information.
Apart from Chvalovský, who is currently an administrator and sponsor of the lower division football club Chmel Blšany, three other men who represented companies that were all linked received prison sentences: Ladislav Filp (eight years), Zdeněk Mezera and Miloslav Brodacký (seven years, each), and Petr Francl (six years).
The trial began in April this year after a delay of 10 years. The reading of the charges alone took three hours, and prior to being questioned by the prosecution Chvalovský delivered a statement lasting five hours. In his defense, Chvalovský claimed he was defrauded by Komerční banka and that some of the loans were to be used to provide credit to the purchasers of the wholesale exports of food and agricultural produce.
According to the prosecution, in 1998 and 1999 Chvalovský and his associates applied to Komerční banka to extend loans to a number of companies, first and foremost Reality trading, Českomoravská agrární společnost and Satrapa. They claimed the money would be used to purchase pork, beef and Žatec hops for export. In another case, the bank extended the accused a loan to finance preparatory work for the construction of a residential complex in the Střížkov district of Prague.
The men were found to have spent the money for completely different purposes — mainly for paying off previous debts that arose from the financing of their businesses. Chvalovský was found to have spent part of the loan for his personal benefit. The prosecution alleges several former high-placed Komerční banka employees were complicit in the fraud.
The prosecution alleges several former high-placed Komerční banka employees were complicit in the fraud. Former executive board member and deputy executive director, Vladimír Šulc; former director of the banking division, Pavel Kalvoda; his former deputy of the banking division, Miroslav Čermák; and former executive director, Jan Kollert, who has since died, were charged and put on trial. The trial was, however, suspended in 2008 for an indefinite period.
Chvalovský and his four colleagues have said they will appeal against the municipal court’s ruling. He was president of the Czech Football Association from 1993 until 2001 and also sat on the executive board of UEFA.