Police charge Kozeny and Vostry with fraud

29-07-2003

Ask any Czech today who Viktor Kozeny is and the answer would probably not be suitable for children. There is no doubt that there is nothing many Czechs would like more than to see Mr Kozeny behind bars, forever. He has been accused of abusing the so-called coupon privatisation after the fall of Communism through which he absconded with billions of Czech crowns belonging to thousands of small shareholders. On Monday, the Czech police finally decided to take action, giving those affected fresh hope that the man responsible for their losses will soon be brought to justice.

Viktor Kozeny, photo: CTKViktor Kozeny, photo: CTK In the early 1990's, the right-wing government of Vaclav Klaus sold off shares in large state-owned companies, giving ordinary Czechs the chance to acquire them as a good investment for the future. Forty years of Communist rule, however, meant most people were unacquainted with ins and outs of share deals. Many, therefore, decided to allow the promising Harvard Investment Funds, founded by Viktor Kozeny, to manage their assets. But instead of managing their shares, Mr Kozeny took the billions of crowns and left the country. A few years later, news broke that Mr Kozeny had appeared in the Bahamas with Irish citizenship. Shareholders have waited years for Mr Kozeny to be prosecuted. Almost two years ago, on September 18, 2001 the Czech police announced they would bring charges against him. It was not until Monday, that the plan was realised.

The former president of the Harvard Investment Funds Viktor Kozeny and the former chairman of the Harvard Industry Holding executive board Boris Vostry, who now lives in Belize, have been charged with fraud and will be prosecuted as fugitives. According to the state prosecution service, investigators can now start the process of questioning witnesses, obtaining expert opinions and requests for legal assistance abroad. The court has already appointed a defence counsel for the accused. Czech law furthermore allows for the defendants to be sentenced in absentia. In addition, an international arrest warrant can be issued.

Karel Stanek from the Czech Association for the Protection of Small Shareholders has welcomed this development:

"It really is great news but unfortunately comes one and a half years late. We have been putting all our efforts into pushing for police action but were told by the former investigator that the prosecution of Mr Kozeny and Mr Vostry as fugitives was impossible. Now I think things will move significantly forward and I believe that the police will take a similar approach to those who are still working for the defendants here in this country. I also think that finally the property of both men will be confiscated; a police prosecution was a condition for that. With that, the Harvard shareholders will get closer to their property. It will certainly not be easy as the two criminals obviously took all the money abroad."

Mr Kozeny and Mr Vostry have already reacted to the charges. "To be judged ten years after my departure from the Czech Republic, and in addition, by people who consider 'the transfer of property abroad' a crime, equals the burning of witches at the stake. As a foreign citizen I will use all my rights against this political trial" Mr Kozeny is quoted as saying in a statement for the CTK news agency. Mr Vostry, on the other hand, called the charges "scandalous", saying he would defend himself with all the legal means possible.

29-07-2003