A joint investigation of Bivol and the Czech Center for Investigative Journalism under the project OCCRP (Organized Crime and Corruption Reporting Project) reveals links of electric power distribution company Energo-Pro with the weapons firm Omnipol, connected to huge corruption scandals and fined for an unprofitable weapons deal with Bulgaria.
The investigation was prompted by a brief notice of Energo-Pro Sales JSC through the Bulgarian Stock Exchange at the end of last year. The company informed that it has deposited 29.3 million levs in the Czech company Viamon s.r.o. with an annual interest rate of 4% and a term expiring on June 30, 2014. The notice claimed that Viamon s.r.o. is not part of the group of the owner Energo-Pro a.s., which is the owner of the Bulgarian company, but was a disinterested third party.
The deal is interesting because Energo-Pro has more than 150 million euros debt to banks and at the same time suffered losses in the amount of 16.1 million levs in the first three quarters of 2013. Together with the other electric power distributors, Energo-Pro constantly complains from the watchdog and pushes for increasing electricity prices, and was recently probed by the State Agency for National Security (DANS). In the last quarter of 2013, Energo-Pro ended with a profit of 40 million levs, which equals a profit of 23 million levs for the entire 2013. This money, however, ended in the treasury of the Czech company Viamon. Is the granting of this significant loan to Viamon, a company with apparently modest means, justified and is this company really not connected with Energo-Pro shareholders?
Czech oligarchs, TIM and 155 million euros in loans
The Czech company Energo-Pro a.s. acquired the electricity distribution business in northeastern Bulgaria after a deal with German company E.ON in 2012. The state also had shares in E.ON, which it sold through the investment broker First Financial Brokerage House (PBK) of Tseko Minev and Ivaylo Mutafchiev, who was recently exposed as agent with the alias “Kamen” of the Communist State Security (DS). The profit for the state treasury from the sale amounted to 67.7 million levs.
The main shareholder in Energo-Pro Sales JSC, with 67%, is Energo-Pro Varna Ltd., which in turn is owned by the Czech Energo-Pro a.s.. After buying the shares, the Czechs pledged Energo-Pro Varna against a loan from the Czech PPF Bank for 78631788 euros. Energo-Pro Ltd., which in 2013 merged with Energo-Pro Varna, is also pledged, but in the Czech Export Bank for 67946985 euros.
Among other larger shareholders, 16.66% stake is owned by the Luxembourg bank Clearstream, which years ago was involved in a corruption scandal in France. Rumors, which began spreading during the protests in the spring of 2013, about an alleged powerful crime group, TIM, controlling Energo-Pro have not been confirmed. Currently, about 8% of the shares are in different companies associated with Himimport, the flagship company of TIM.
In addition to Bulgaria, Energo-Pro has such business in Georgia. In the Czech Republic, Energo-Prois listed in the town Svitavy, at the following address: nám. Míru 62/39. The company has a registered capital of 4.75 million US dollars, divided between Jiri Krusina (75%), and Jaromir Tesar (25%) The two are also managers of the company, together with Peter Tesar. Krusina and Tesar are not particularly well-known in their homeland, despite being rated among the top 25 wealthiest Czechs. However, companies and individuals related to them are involved in the largest corruption scandals in the Czech Republic in the past 15 years.
Not quite uninterested persons
The company Viamon s.r.o., which received a loan of nearly 15 million euros, deals with real estate trade and is registered in Svitavy at nám. Míru 11/89, next door to Energo-Pro a.s.. The only property of the company is a building, declared monument of culture, located in the center of Litomyšl and a plot of land in the suburbs of the same city. Its price is in no way compatible with the amount of the loan.
The company was founded in November 1996 by Martin Vidra with registered capital of 5000 US dollars. In April 1997, the shares were bought by the company Poličské strojírny a.s., which resold them one year later to Zdeněk Netolický, current owner and manager of Viamon.
Interesting persons pop up in this seemingly harmless company history. The sole shareholder in Poličské strojírny a.s. is the weapons company Omnipol s.a., and in the period from January to November 1997, when Poličské strojírny owned Viamon, one of the managers of Poličské strojírny was Jiri Krusina, current manager of Energo-Pro a.s. and manager of the Bulgarian company Energo-Pro Bulgaria. It emerges that Viamon and Energo-Pro are not entirely “foreign” to each other, though there is no formal connection between them at the moment.
Bivol contacted Energo-Pro Sales for comment on these facts, but the company ignored our request.
Dangerous Liaisons – Omnipol and the unfit Bulgarian missiles
Another interesting fact is that from June 1997 to February 1998, the emblematic weapons dealer Pavel Musela was present in the management of Omnipol.
And, exactly when Musela and Krusina were managers, Omnipol won a tender to supply missiles to the Czech army worth 3.5 million US dollars. Between 1998 and 2000, the company delivered 80 unfit Russian missiles “Shturm” (Assault), produced in 1983. The missiles were bought from Bulgaria and arrived with forged documentation to meet the requirements of the tender not to be produced earlier than 1996.
The Bulgarian Ministry of Defense has verified the capability of missiles and has done so on behalf of the Czech National Armaments Service, stated Czech Deputy Defense Minister Jaroslav Tvrdik before “Hospodarske News” in January 2001. The deal was subject to a parliamentary inquiry, and the scandal was closed only in 2011, when the Czech court imposed on Omnipol a fine of 115000 US dollars. There were no consequences in Bulgaria. (look here and here).
After 1998, Pavel Musela, who is close to former Czech Prime Minister Stanislav Gross, was tangled in two major corruption scandals. In 2011, the Swiss and Belgian authorities investigated money transfers related to the privatization of the Czech coal company MUS by Appian Group in 1999. Over 100 accounts were established in Switzerland, with nearly 600 million Swiss francs, related to the MUS deal. Among them was a transfer of 5 million US dollars to an account in Gibraltar, to which Musela had access. There are suspicions that this money was used to pay commissions to politicians. (look here).
The other big corruption scandal involved the delivery of armored carriers for 1 billion US dollars for the Czech army. In early 2010, the Austrian company Steyr, owned by the US General Dynamics, was accused of giving bribes in the amount of nearly 60 million US dollars to politicians from the left wing and from the right wing to approve the contract. According to the investigation of the leading Czech daily “Mlada Fronta Dnes,” these payments went through Musela’ consulting firm PAMCO. An investigation, still ongoing, began in the Czech Republic and in Austria. (look here).
Musela was a key witness in both scandals, but couldn’t be questioned as in 2008 he suffered amnesia after a suspicious hunting accident. While hunting for deer, Musela fell from his waiting spot, broke his skull and miraculously survived with permanent brain damage. His hunting partner was arrested on suspicion of having caused the fall by hitting the seat with the butt of his rifle, on which blood was found. The DNA test, however, cleared him.
On November 10, 2011, Karel Musela, brother of Pavel Musela, shot with a firearm two managers of the Moravian factory Aircraft Industries, and then committed suicide. According to investigators, it was an act of revenge against those whom Karel Musela regarded as the masterminds behind the incident with his brother.
This post is also available in: Bulgarian