Czech presidential candidate Babis cleared in fraud case

By Robert Muller and Jan Lopatka

PRAGUE (Reuters) -A Czech court on Monday acquitted former prime minister Andrej Babis of alleged fraud in securing EU subsidies, improving the billionaire's prospects in a presidential election this week in which he is among the favourites.

The prosecution had sought a suspended jail term and a fine, accusing Babis of hiding his ownership of one firm 15 years ago to illegally tap 2 million euros ($2.1 million) of European Union funds to build a leisure and conference centre near the capital Prague.

Prague Municipal Court judge Jan Sott said it had not been proven that what Babis and one of his managers did was a crime, as the court was convinced there was no intention to create a fiction in order to receive the subsidy. The state attorney is considering an appeal.

Babis, who denied any wrongdoing, welcomed the verdict.

"This is good news for the entire Czech Republic, all citizens, that we live in a rule of law country and have independent justice and a court that independently ruled that we are acquitted," he told reporters, referring to himself and one of his managers who was also accused.

Babis, 68, built the Agrofert Group business empire with interests in farming, chemicals, food processing and media. He placed his business interests into a trust in 2017 amid accusations of conflicts of interest with his government roles.

His businesses receive millions of euros in EU subsidies every year under the bloc's agricultural policy in addition to subsidies for investment projects.

Babis was finance minister in 2014-2017 and prime minister in 2017-2021. A centre-right coalition unseated him in 2021 despite his centrist ANO party winning more seats in parliament than any of its rivals.

THREE-WAY RACE

Babis is in a race with independent rivals Petr Pavel and Danuse Nerudova - both backed by the current centre-right government - for the presidency, opinion polls have shown.

No candidate is expected to win outright in the first round, which takes place on Friday and Saturday, meaning a run-off round between the two top candidates would follow on Jan 27-28.

Polls have projected Babis losing in the second round to either of the other two leading candidates.

Czech presidents do not wield much daily executive power, which lies with the government of the NATO and EU member.

But they help shape public opinion, represent the country abroad and appoint prime ministers, central bank board members and constitutional court judges.

Babis is also the subject of another investigation related to the same conference centre outside Prague, and a French investigation over a financial fraud allegedly involving his purchase of property in France, according to French media.

He has denied wrongdoing in those cases as well.

($1 = 0.9353 euros)

(Reporting by Robert Muller and Jan Lopatka; additinoal reporting by David W. Cerny; Editing by Hugh Lawson and Conor Humphries)