European prosecutors investigate Czech PM Babis subsidy case, report says

PRAGUE, July 14 (Reuters) - European prosecutors have opened an investigation into EU subsidy payments to companies formerly owned by Czech Prime Minister Andrej Babis, news website Seznam Zpravy said on Tuesday.

Babis, 71, leads the populist ANO party and built a business empire spanning agriculture, chemicals, food processing and other industries, including the Agrofert group, which comprises hundreds of companies.

After returning to office late last year, Babis transferred Agrofert — which receives tens of millions of euros a year in EU agricultural subsidies — to an independently governed trust fund.

Babis has repeatedly said the arrangement exceeds the requirements of Czech and EU conflict-of-interest rules.

FINANCE MINISTER DEFENDS BABIS

The European Public Prosecutor's Office (EPPO) has asked Czech police to cooperate with the investigation, Seznam Zpravy reported.

"Following proper verification of information, I issued a decision on May 24, 2026, on initiating criminal proceedings," the website quoted prosecutor Daniela Bartikova as writing in a document. It did not give details of the document.

The EPPO and the Czech government's office did not immediately respond to requests for comment.

The Czech police's National Organised Crime Agency said it was "dealing with the matter" based on the EPPO's instructions, but did not give more details when asked about Seznam Zpravy's report.

The opening of an investigation does not imply wrongdoing and may not result in charges.

Finance Minister Alena Schillerova said on Tuesday she was convinced that Babis had resolved any conflicts of interest.

Critics of Babis, including opposition parties, have questioned whether the trust arrangement sufficiently separates him from Agrofert. Seznam Zpravy cited unpublished trust documents suggesting members of his family could regain control of the business after he leaves office.

The European Commission has also sought information from the Czech government about Babis' trust arrangements and other companies he continues to own.

Czech authorities allowed a number of subsidy payments to resume after the transfer of Agrofert to the trust fund.

Seznam Zpravy said the EPPO was examining both current subsidy payments and whether Czech authorities should have sought repayment of about €300 million ($342 million) in subsidies paid while Babis was prime minister from 2017 to 2021.

The opposition Pirate Party said on Facebook on Tuesday that the investigation followed a petition it had filed concerning past subsidy payments.

In addition to direct farm subsidies, Agrofert has received EU funding for a range of innovation projects.

($1 = 0.8766 euros)

(Reporting by Jan Lopatka. Editing by Mark Potter)