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Andrej Babiš accused of buying real estate in France via offshore companies

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Czechia – A few days before the parliamentary elections to be held on 8–9 October, a new affair is causing a stir in the Czech Republic. As he admitted on national television on Monday, 4 October, Czech Prime Minister Andrej Babiš did buy sixteen properties in France – in fact a property complex in Mougins, north of Cannes in the Maritime Alps – via offshore companies for a total of 381 million koruna (15 million euros at the time).

A procedure recommended by the real estate agency 

Babiš stated that this procedure was recommended to him by a real estate agency and that, although it would have been inappropriate given his current status as a politician, he was not yet involved in politics at the time:

It was a recommendation from a real estate agency; they recommended buying through a lawyer. There is nothing illegal about it.

According to Babiš, this should not be an issue now:

I don’t own any offshore company, nor any real estate in France. Due to the Czech ‘Lex Babiš’ law, I don’t even own my former Czech company anymore,” he explained.

Property transferred to trust funds under the ‘Lex Babiš’ law 

As for Babiš’s companies, Agrofert and SynBiol, the Czech PM did transfer these assets to trust funds in 2017 to comply with the so-called ‘Lex Babiš’ law, while remaining the beneficiary of the said funds. He will be able to recover his assets as soon as he leaves political office. Is the same true for the sixteen properties he bought in France?

According to the website,

Andrej Babiš channelled nearly 400 million koruna through his offshore companies, which he then used to buy real estate on the French Riviera, including the Château Bigaud [in Mougins]. The operation [bears] the hallmarks of money laundering, experts say…”

The hallmarks of money laundering… 

The investigative site goes on: “In July 2009, the French law firm DB Artwell Avocats asked its Panamanian colleagues [at the Alcogal law firm] to provide a special service to its Czech client: the latter wanted to set up companies anonymously in discreet tax havens. The client was Andrej Babiš, the current Czech Prime Minister. Four months later, Babiš used this structure to transfer 15 million euros (381 million koruna at the time) from one of his companies to another. In a way, he simply gave himself a loan. It involved the purchase of sixteen luxury properties in France, including Château Bigaud on the French Riviera.

Experts agree that the transaction bears the hallmarks of money laundering. ‘No normal business transaction would look like this’,

says Kamil Kouba, a former financial crimes investigator who is now an anti-money laundering consultant.

Czech Prime Minister Andrej Babiš has continued to defend himself by saying: “I have never done anything illegal […] but that doesn’t stop them from trying to denigrate me and influence the Czech parliamentary elections.” Given the timing of these media revelations linked to the so-called Pandora Papers, Babiš may be right. However, ANO, the party of the outgoing Prime Minister, remains in the lead in the polls with around 25% of voting intentions, ahead of the centre-right alliance SPOLU (approx. 21%) and the Pirate Party (approx. 18%), with the “right-wing populist” party SPD at around 11%.