Cabinet agrees on Agriculture Minister's call to sack Land Fund board

10-11-2005

The Cabinet on Wednesday accepted Agriculture Minister Petr Zgarba's proposal that Parliament dismiss the entire board of the powerful Czech Land Fund - the body responsible for the sale and management of state-owned land. The proposed sacking of the Land Fund board - of which Mr Zgarba is chairman - comes in reaction to outcry over the sale this summer to "speculators" of property now worth hundreds of times the asking price.

Agriculture Minister Petr Zgarba, photo: CTKAgriculture Minister Petr Zgarba, photo: CTK Peter Smith: Brian Kenety has been following developments and joins me now in the studio. Tell us a bit more about this land deal and why it was so controversial.

"In short, this summer, a number of people bought huge tracts of land on the cheap, and the scent of corruption is in the air. One deal involved land on the outskirts of Prague, in the district of Uhrineves, where shortly after the Czech Land Fund agreed on the sale, a change in the local zoning law went through - which allowed for the construction of a residential housing project - and suddenly, that land was worth literally nearly 400 times the sale price."

"Also, the board had made a decision to accept all outstanding restitution claims up to a certain date. This fact was not made public, but it appears that private buyers were aware of the decision and acted on that knowledge."

PS: So the implication is that, at best, the Czech Land Fund used very poor judgment, and at worst, may have passed on "inside information" as it were.

"Yes, and several board members and employees have already been given their walking papers, although not charged with any crime. But in fact it was an old friend of Agriculture Minister Petr Zgarba who obtained the largest parcel of land in the Uhrineves deal. The Czech Land Fund sold it for the equivalent of 160,000 US dollars. If sold today -- at the going market rate - it could easily fetch 50 million dollars."

Martin KocourekMartin Kocourek "Now, although Mr Zgarba abstained from the vote which allowed his friend Gabriel Vecera to buy the land, the main opposition Civic Democratic Party is loudly calling for his resignation from the Czech Land Fund and as agriculture minister. Party deputies have said they will not accept the naming of a new board unless Petr Zgarba steps down."

"But the Civic Democrats also have to tread a bit softly-softly because one of their own, Martin Kocourek, who was meant to be a party regional election leader, has been tainted by the affair."

PS: Whatever the outcome in Parliament, I understand that an audit is underway at the Czech Land Fund.

"That's right. For starters, some the 170 or so deals agreed by the board this summer will come under intense scrutiny. But there are many other deals - such as the sale of land near the Ruzyne Prague International Airport, to an investment fund - that are set to get the same treatment. And the Mayor of Prague, Pavel Bem, himself a Civic Democrat, has asked the courts to prevent some sales from going through, so we can expect some high-profile legal battles in the near future."

10-11-2005