CS fund

The CS Fond case is one of the best-known examples of the “tunneling” of companies, that is, of the illegal deprivation of company assets through transfers to friendly or just for this purpose sub-companies during the privatization phase of Czech companies.

In 1997, the previously intact holding company CS Fond was "tunneled" within a few days by its owners at the time - the company Motoinvest owned by the Czech oligarch Pavel Tykač - by transferring the entire assets to other companies. The shareholders of C. S. Fond were thus defrauded by a total of 1.23 billion crowns.

course

Initially, Motoinvest representatives sold practically all of the company's assets to allegedly "pay off shareholders in cash". Instead of paying them out, however, they sold the right to manage the entire fund assets to the Cypriot letterbox company Austel Enterprises Ltd. at a price that is still unknown today . From this the right of ownership was transferred to the Prague brokerage firm Crassus von Tomáš Roith, which it finally passed on March 3, 1997 to the Russian company KosMos Ltd. sold.

The board of directors, the management and the investors of CS Fond only learned of this change or the sale after a Prague notary confirmed the new owner of the company on March 3, 1997: the Moscow company KosMos Ltd. The representatives of KosMos Ltd., including the businessman Nikolaj Trofimov, registered three Czech citizens as new statutory representatives of the company under the same notarial deed . One of them, the then 21-year-old Václav Franta from Chrastava near Liberec, received the power to sign and authorization to carry out transactions for the company.

On the same day, Franta arranged for Plzeňská banka to transfer all of the company's assets in the amount of 1.23 billion crowns to the account of Swirlglen Ltd. at the Prague bank Girocredit. Swirlglen used the assets to buy worthless shares in the Drůbež Příšovice poultry farm, which were not publicly tradable. Bank Girocredit found the transactions so suspicious that they turned to the Ministry of Finance. Their financial analysis department, which has the authorization to suspend transfers, stopped the transfer and then examined the case. However, after a meeting of two representatives of the Swirlglen company with the responsible department director Jiří Kudlík, the transfer of the money abroad was approved on March 11, 1997. On March 12, 1997, all of the company's assets disappeared from accounts in Switzerland , Liechtenstein , Gibraltar and the United States .

Court process

The company's shareholders refused to accept the loss of money and filed several claims for damages.

From mid-1999, the Crassus managing directors, Petr Müller and Jaromír Florián, were investigated. They had "created" worthless shares in Drůbež Příšovice as through several financial transactions and then sold them to KosMos for more than one billion crowns. Ltd. sold.

In January 2001, four men involved in the billion-dollar fraud were sentenced by the Prague City Court to five to ten years in prison. In September 2003, however, the High Court in Prague referred the case back to the City Court to supplement the evidence, since the City Court had used an interrogation of Trofimov as evidence, which the defendants' defense lawyers were unable to attend.

In March 2002, former investors in the company won a lawsuit against Plzeňská banka, which was not allowed to carry out the transaction in question as depository custodian.

Another important judgment was passed at the end of February 2003. The Prague District Court ruled that the Ministry of Finance had to reimburse a former partner in the company - Zdeněk Řepka - 88,000 crowns in damages and the costs of the legal proceedings. The ruling was good news for the rest of the shareholders, as it was the first such damages litigation that the Treasury Department lost.

Pavel Tykač

In October 2007 the police applied to the public prosecutor's office to also indict Pavel Tykač for fraud involving billions. This application was initially rejected because of alleged lack of evidence. However, on January 7, 2013, the High Court in Prague decided to reopen the case after entrepreneur František Chobot announced in 2012 that he had helped Tykač cannibalize the company.

On the basis of Chobot's testimony, the public prosecutor applied for a retrial against Tykač. The City Court in Prague found that the termination of the proceedings in 2007 was premature in light of the new information. The courts had previously imposed four to eight years' imprisonment without parole for misappropriating assets. In the opinion of the city court, however, these were only "puppets" led by others - mainly Tykač.