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Vol 3, No 13
2 April 2001
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Czech newsNews from the
Czech Republic

All the important news
since 24 March 2001

Mark Preskett


More Železný trickery?

View today's updated headlines from the Czech Republic and Slovakia

The director of Czech TV Nova, Vladimír Železný, made headlines again this week for failing to pay USD 27.1 million to the US-owned Central European Media Enterprises (CME). Last month, an international arbitrator in Amsterdam ordered Mr Železný to return the money to CME. In addition, CME was ordered to return shares in TV Nova to Nova Consulting. At the moment, these shares have little value.

Nova Consulting sold the controlling stake in TV Nova to CME for USD 28.5 million in October 1997. Four days after the sale, Železný allegedly signed another contract with a Liechtenstein company, Astrona Foundation (AF). The contract stipulated that if the deal with CME was ever annulled and the shares in TV Nova returned to Nova Consulting, then the Astrona Foundation would buy the shares at the same price. A provision in the contract further stated that a fine would be payable if both parties failed to adhere to the agreement. A loss in value of the shares was also deemed a breach of contract.

According to documents acquired by Mlada fronta Dnes on 19 February, a representative of Astrona, Walter Schlegel, called on Mr Železný to pay a fine of USD 28.5 million. The next day, Mr Schlegel wrote to Železný confirming receipt of payment. Železný is claiming that the sum paid to Astrona amounts to damage incurred by Nova Consulting as a result of CME's financial mismanagement and should be considered 'equivalent' to the amount Železný was ordered to pay CME.

The authenticity of the Astrona contract is now being called into question. It is unclear whether or not the Astrona Foundation actually exists. According to Mlada fronta Dnes, the company's name cannot be found in the Liechtenstein company register. Mr Schlegel, who now works for another company, has refused to comment on the matter.

The contract that Železný's lawyer submitted to the Prague city court also contains a major discrepancy. On 11 August 1997, when the contract was supposedly signed, Nova Consulting was housed on Sibeliova street, not on Na Valech as the contract states. Nova moved to the new location in November 1998. After Mlada fronta Dnes, brought this matter to light on Wednesday, the contract in question mysteriously 'disappeared' from the court's files.

Despite facing a USD 3500 fine for every day of delayed payment to CME, Železný continues to claim that he is in the process of gathering the sum. Yet, he managed to pay the Astrona Foundation an equivalent amount within a day of receiving Astrona's 'bill'.


Kavan under fire

Czech Foreign Minister Jan Kavan has come under fire this week over his authorization of a contract regarding the lease of the Český dům building in central Moscow.

Until this year, the property was run by the Czech Embassy. This ended with the passing of a new law in January which banned Czech missions abroad from operating commercial enterprises. Instead of running a tender as the law stipulates, Mr Kavan signed a five-year lease agreement with a Czech company whose founders consisted mainly of former embassy staff.

The agreement set the rent well below market rates and allowed the firm to import an unlimited quantity of goods for sale in Russia. These goods would be labeled as items intended for diplomatic use and, therefore, would not be subject to the usual tax and customs duties.

On Tuesday, Kavan's aide Karel Srb resigned after accepting full responsibility for the contract. "The Minister was not fully informed," Mr Srb wrote in his resignation letter. However, opposition politicians say Kavan, who personally hired Mr Srb, approved the deal at every stage and should take responsibility himself.

The Czech daily Mlada fronta Dnes, which broke the story, accused the Foreign Minister of lying. They stated that Mr Kavan told parliament that the contract went through the standard approval procedure at the Ministry. In fact, Kavan's deputies never saw the contract. Dnes also accused Kavan of lying about the length of time the Ministry had to draw up the contract. Kavan originally said three months, but they actually worked on it for nearly six.


Drop the clause!

The US has unofficially threatened that the NATO summit due to be held in Prague in 2002 might be moved elsewhere. According to the Czech daily Lidové noviny, a source close to the President's Office said that the US has pushed back the date for scheduling the summit and does not regard the venue as fixed.

According to the Czech ambassador to the US Alexander Vondra, who is also in charge of preparations for the NATO summit, Czech/US relations are not at their best. The main reason for this is a clause the Czech Republic is seeking to add to a UN resolution concerning human rights violations in Cuba. The clause, which states that economic sanctions against Cuba are ineffective, has been sharply criticized by the US.


June? Probably not.

The Minister for Trade and Industry, Miroslav Gregr, has stated that the highly controversial nuclear power plant at TemelÍn, which was launched last year, will be fully operational in June. Employees at the power utility giant CEZ and Temelín itself have publicly questioned this deadline for the first time.

"The deadline is unrealistic," Chairwoman of the State Council for Nuclear Safety Dana Drábová told Lidové noviny on Wednesday. The news came the same day as another shutdown of the plant was announced. The problem was again excessive vibrations. This is the sixth shutdown at Temelín this year.

Mark Preskett, 30 March 2001

Moving on:


Hospodárské noviny
Lidové noviny
Mladá fronta Dnes
ČTK-Czech News Agency

Today's updated headlines from the Czech Republic and Slovakia

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