A lawsuit has been filed against Agroferta for subsidizing the toast line.

The European Union has requested evidence from the Czech Republic to confirm whether Prime Minister Andrej Babiš is no longer in a conflict of interest following his transfer of shares in the Agrofert agricultural company into a trust fund. The Czech government has refused to provide this information, citing a lack of access to the official statutes of the trust fund, which remains under scrutiny by both domestic and international authorities. This situation highlights ongoing concerns about potential conflicts of interest involving Babiš, who previously owned Agrofert before placing its shares into the trust.

The EU’s request was made via a letter sent to Prague in late May, signed on behalf of five directorates-general of the European Commission. It emphasized that the Czech government had yet to resolve the issue of whether the trust fund, known as RSVP Trust, complies with EU regulations against conflicts of interest. The letter required the Czech government to submit a detailed legal analysis within one month, confirming whether the new structure of the trust fund eliminates these concerns. However, the Czech Ministry of Regional Development, responsible for communication with the EU, declined to comply with the request.

According to the ministry's response, it does not have access to the official statute of the trust fund, only a version published in the media. The ministry argued that it lacks the authority to assess such matters independently, stating that neither national laws nor EU regulations grant any central administrative body the power to issue binding opinions on the matter. Despite this, the ministry suggested that the new arrangement might eliminate previous concerns raised by the EU regarding earlier versions of the trust fund used between 2017 and 2021 when Babiš was still in office.

Experts argue that the hidden nature of the trust fund’s statute raises questions about its compliance with EU rules. According to leaked documents obtained by Seznam Zprávy, the trust fund’s governance structure allows Babiš’s children to potentially appoint him as the fund’s manager, thereby granting him indirect control over Agrofert again. This contradicts Babiš’s public claims that he has fully relinquished ownership of the company, transferring it permanently to his children after his death.

Meanwhile, the European Anti-Fraud Office (OLAF) has begun investigating potential conflicts of interest related to Babiš’s management of Agrofert. In 2017, OLAF investigated the so-called “Čapí hnízdo” case, where Babiš was suspected of misusing funds from the Agrofert holding to secure a €50 million subsidy. Although Babiš avoided prosecution due to parliamentary immunity, the current investigation focuses on the new trust fund structure. OLAF confirmed it is examining the matter but did not comment further, emphasizing that it follows standard procedures before deciding whether to initiate formal investigations.

In addition to the EU’s inquiries, the Czech government faces another challenge in the form of a criminal investigation initiated by the European Public Prosecutor’s Office (EPPO). On Monday, EPPO submitted charges against the Pekárna Zelená Louka bakery, part of the Agrofert group, and two individuals for fraud related to a €100 million EU subsidy for an innovative bread-making line. The accused are alleged to have misled the Ministry of Industry and Trade, which approved the funding based on false information. Following an audit by the European Commission, the subsidy was revoked, resulting in a financial loss of approximately €4.1 million (around CZK 100 million) for the Czech state budget.

Premier Babiš has dismissed the charges as politically motivated, claiming that the EU initially focused on the conflict of interest issue before fabricating the innovation claim. Agrofert maintains that the bakery acted in accordance with the law and deserved the subsidy. However, the police have already sealed off the bakery’s assets, including its production hall and surrounding buildings in the village of Herink, valued at around CZK 98 million.

The situation reflects broader tensions between the Czech government and EU institutions regarding transparency and accountability in managing public resources. While the Czech government insists it has resolved the conflict of interest issue through the trust fund, the EU continues to demand clear legal proof. Meanwhile, the ongoing investigations by OLAF and EPPO suggest that the European authorities remain skeptical of the current arrangements and are prepared to take further action if necessary. As the year progresses, the outcome of these legal proceedings will likely shape the political landscape in the Czech Republic and influence future relations with the European Union.