04-12-2003

Central Bank sees higher CPI risks, but not as a problem

The Czech National Bank Vice-Governor Ludek Niedermayer said that inflationary risks have slightly increased in the Czech Republic. However, the central bank does not consider them a problem because inflation is still far below the target. He also said that there was no motion to raise or cut interest rates at the CNB board's monthly policy meeting on Thursday.

SEC launches new system to detect dubious deals

The Czech Securities Commission has introduced a new system for detecting suspicious transactions. The system automatically highlights unusual deals with securities, which could help uncover illegal practices, including money laundering. The implementation of the system cost over 3 million USD, but the European Union contributed more than half the amount.

Czech CEZ to bid for Slovak power utility

The dominant Czech power producer CEZ announced it will submit an offer for the Slovak state-owned utility Slovenske Elektrarne by Friday's deadline, confirming its strong interest in growing abroad. CEZ spokesman Ladislav Kriz told Reuters the company will hand out a detailed bid with a business plan for all of Slovenske Elektrarne assets, including two controversial nuclear power plants. Besides CEZ, there are seven other bidders, but most of them are interested in selected assets only. State-controlled CEZ and Slovenske Elektrarne used to be a single company in the former Czechoslovakia. Earlier this year, Czech government officials mentioned the possibility that the Czech government might offer a 17-percent stake in CEZ to the Slovak government if it decides to sell Slovenske Elektrarne to CEZ.

Business confidence cools down in November

Czech business confidence cooled in November after a sharp rebound in the previous month, while consumer confidence picked up from its lowest in more than three and a half years. The Czech Statistic Office said its business confidence index dropped to a seasonally adjusted 104.1 from October's 106.1, which was its highest in nearly two and a half years. The consumer confidence index edged up to 87.7 from October's low of 84.5.

Government to issue more state bonds to finance budget deficit

The government is planning to issue state bonds worth almost 140 billion crowns, or more than 4.5 billion USD, next year. The bonds will mainly be used to finance the expected state budget deficit. The total amount of Czech state bonds will exceed 600 billion crowns or 20 billion USD.

Coal barons charged with misuse of insider information

Viktor Kolacek, photo: CTKViktor Kolacek, photo: CTK The police in North Moravia have filed charges against the three main figures in a North Moravian coal mining empire. Viktor Kolacek, Jan Przybyla and Petr Otava are principal owners of a large investment company Karbon Invest. They also act on the supervisory and executive boards of the country's largest black coal mining company OKD, which is controlled by Karbon Invest. The charges are related to disadvantageous contracts which the managers allegedly signed between OKD and Karbon Invest, by which they apparently stripped OKD of more than 1.5 billion crowns.

The OKD coalmine is controlled by Karbon Invest, but the state holds a 46-percent stake. The criminal charges against OKD managers come shortly after a recent announcement by the government that it would hold exclusive talks on the sale of its stake in OKD with Karbon Invest and at a time when OKD is bidding for the government's stake in North Bohemian brown-coal mine Sokolovska uhelna.

Mr. Kolacek is believed to be one of the most influential people in the Czech Republic. The companies within his coal empire employ a total of 35,000 staff and generated aggregate sales of 45 billion crowns in 2002.

04-12-2003