Czech Billionaire Minister Is ‘Ready’ to Leave Cabinet If Asked

  • Premier Sobotka asks Babis to explain business transactions
  • Finance Minister Babis has rejected allegations of wrondoing

An intensifying conflict between Czech Prime Minister Bohuslav Sobotka and billionaire Finance Minister Andrej Babis is threatening to blow up their coalition government six months before they face each other in October general elections.

Babis, whose ANO party is attracting protest voters and has a wide lead over Sobotka’s Social Democrats in opinion polls, said on Thursday that he was ready to quit the government if the premier asked him to but later said he saw no reason to resign. Earlier in the day he said that Sobotka, who questioned the legality of Babis’s business activities, may be preparing the ground to fire him before the ballot. Sobotka said Babis may have engaged in “tax tricks or even tax evasion” as he built his empire, repeating allegations that the minister has rejected.

“The suspicions regarding the finance minister jeopardize not only the proper functioning of the government but also the very credibility of the state,” Sobotka told reporters in Prague in a hastily called news conference. He gave Babis until end of the month to provide explanations about his businesses and said he will then will decide on further steps.

Andrej Babis

Photographer: Martin Divisek/Bloomberg

The turmoil coincided with a government clash in fellow ex-communist European Union member Croatia, where the ruling coalition looked set for collapse in a row over that country’s finance minister. While the Czech government has outlasted most of the country’s past cabinets and used an economic recovery to balance public finances, Babis and Sobotka have bickered over issues from the Social Democrat’s proposal to slap extra taxes on banks to the tycoon’s ownership of a chemicals and media empire. Their conflict escalated after Sobotka presented document that his aides compiled raising questions about Babis’s business transactions, including tax-optimization activities and the acquisition of his assets.

“I have a lot of work that I wanted to finish here, but if the prime minister decides to dismiss me, I’m ready,” Babis said on his Twitter page along with a photo of himself next to cardboard boxes full of files. He earlier told iDnes.cz, a news website that he owns, that his ANO party isn’t planning to pull out of the government. He said the government can complete its four-year term if Sobotka wants it to.

While the Social Democrats teamed up with the opposition to tighten conflict-of-interest rules earlier this year, Babis has refused to sell his holdings. But he did transfer control over his company Agrofert to a trust fund to comply with the legislation.

‘Political Weapon’

A Stem poll conducted in early April showed ANO would get 28.3 percent of votes if parliamentary elections were held now. The Social Democrats would win 16.6 percent and the Communists would finish third with 12.2 percent.

Babis, the most popular party leader, has a fortune of more than $3 billion, according to Forbes. The minister has fought off conflict-of-interest allegations since joining politics and says he isn’t running his empire, which includes 250 companies and employs 34,000 people in 18 countries.

The ANO leader said he entered politics to stop the largest parties, which have rotated in power over the nearly three decades since the fall of Communism, from mismanaging the state and to fight graft.

“The election campaign is starting, and Sobotka clearly thinks that pointing out Babis’s questionable business deals can be a powerful political weapon,’’ said Pavel Saradin, a professor of political science at Masaryk University in the second largest city of Brno. “But he’s also aware that it could bounce back like a boomerang and hurt him, so he’s being careful.’’

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