Monday

24th Sep 2018

Czech 'Mr Clean' embroiled in scandal

  • Skanksa was to build roads in Bohemia (Photo: Rohit Mattoo)

Czech transport minister Dan Tok, dubbed “Mr Clean” for taking the lead in a finance transparency campaign, is embroiled in a cross-border corruption scandal.

Tok, who has been in office for only four months, is accused of turning a blind eye to a bribe that is believed to have been given to Czech officials in the years 2010-2011 to secure a contract for Swedish construction giant Skanska and its partners in the Czech Republic.

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At the time, Dan Tok was a CEO of Skanska Czech Republic. Skanska and one of its Czech partners, Geosan Group, were said to have agreed on a scheme where Geosan would transfer money sent to it by Skanska to officials so that they secure a road-building contract in Central Bohemia.

The scheme, as reported this week by Czech and Swedish public radio channels, was that Geosan won a tender to build a highway bridge but then commission the work to Skanska.

Skanska carried out the work for a lower price than Geosan initially offered in the public procurement they won together.

The difference amounted to more than 100 million Czech crowns – roughly four million euros. It is believed the money went to officials at the Czech-state-controlled road construction authority.

Corruption in the building sector has been widespread in the country.

The story broke after the Czech and Swedish radios published a confession by a former head of the internal audit at Skanska who was in charge in 2011.

The auditor, Anders Blomqvist, claims Dan Tok, as well as several other Skanska company leaders, knew about the mismanagement of the money.

He also alleges that the Czech CEO himself acknowledged, during a meeting in Sweden in 2011, that corruption could have been involved in the disputed money transfer.

“He (Dan Tok) described specific sequences of events which implied he knew about it,” Blomqvist told Czech and Swedish journalists.

The transport minister denied the allegations.

“This man (Blomqvist) is lying. In 2011, he signed off, with his own hand, that the audit of the case was in order,” Tok said in an interview with Czech daily MfD on Thursday. “I’ve never heard of any corruption involved and I didn’t tell the auditor anything of that kind. My conscious is clean,” he added.

Tok later said the deal between Skanska and Geosan Group on the bridge construction was made prior to his arrival to Skanska CZ and he only “inherited" it.

Skanska, for its part, investigated the case. According current financial director of Skanska Group Peter Wallin, the contract “wasn’t executed in accordance with Skanska own inner guidelines". But the company stopped there.

The case is sensitive in the Czech Republic and might cost the transport minister his seat.

Although not a party member, he represents the ANO movement, a junior coalition partner in the Czech government, that defines itself around the fight against corruption and embezzlement of public money.

The leader of ANO – finance minister Andrej Babis – has already said Tok “must explain everything to the Czech public”.

The Swedish Skanska CEO, Stuart Graham, admitted together with other board members that they had been informed about questions raised over the Czech road project.

On a question by the media whether the suspicion of corruption was involved, Graham answered: “Everything was reported to us and we tackled the issue with the audits.”

The Swedish National Economic Crimes Bureau and the Czech anti-corruption police have both launched an investigations of the case. .

Corruption in the EU is calculated to cost around €120 billion a year, around 1 percent of GDP. According to recent surveys, more than half of the population believes that the phenomenon has been increasing in recent years.

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