Ex Czech PM in crosshairs of French money laundering probe

The French prosecutor’s office has opened a money laundering investigation into Andrej Babis’s purchase of luxury property in France through a number of offshore companies, Le Monde reported.

The Slovak-born oligarch became prime minister of Czechia in 2017 but was voted out of office last October after his “anti-system” party ANO (“Action by Discontented Citizens”) narrowly lost the national election after a campaign during which he was dogged with corruption allegations. 

However Babis is currently touring the country, campaigning for the 2023 presidential election, although he has not yet declared his candidacy.

Now Le Monde has revealed that the French Central Office for the Fight against Corruption and Financial and Fiscal Offences has for the last six months been investigating Babis’s complex series of financial transactions in connection with his 2009 property purchases in Mougins, south-east France.

The largest journalistic leak of all time, the Pandora Papers, showed that Babis’ US company took out a EUR 15mn loan from a Babis owned, British Virgin Islands-registered company to fund the transaction. 

The properties, including a chateau used as summer residence on a three-hectare plot, were then purchased for EUR 14mn by a Monaco-based company owned by an offshore entity in the US.

In 2016 and 2018, the former Czech prime minister transferred the property to another entity he owns to his wife, who transferred them back to his holding company that day.

However, according to a bill of sale “paid in cash” obtained by Le Monde, the purchase of the properties in Mougins did not mention the loan agreements in the official French documents. 

Czech journalists failed to find any trace of these assets in Babis’s official wealth declaration after his election to parliament in 2013. As the purchase of the French properties were made in 2009, the probe may be statute-barred.

Babis’s political rivals responded to the report. Marketa Pekarova Adamova, leader of coalition party TOP 09, wrote: “Andrej Babis is haunted by one scandal after another and is unable to draw political accountability from it. Fortunately, he no longer represents us internationally anymore.” 

Babis protested his innocence in response to the report. “I can say that the whole 2009 transaction took place according to the law. It was done by lawyers on the recommendation of the estate agency. The money I sent there was mine and it was taxed,” he told state broadcaster Czech Television.

Babis, who is fifth on Czechia’s Rich List, is also accused of having benefited from EUR 2mn of European funds earmarked for SMEs and will appear in court in connection with this case on September 12.