Czech state to compensate Volkswagen over Skoda´s sale - press

published:

updated:
28.07.2014 08:51

Prague - The Czech Republic will pay 301 million crowns to the Volkswagen automotive company over a bad settlement of debts after the privatisation of the Skoda car maker, daily Lidove noviny (LN) writes today.

foto

Ministr financí Andrej Babiš představil 5. června v Praze výsledky prověrek hospodaření na úřadech řízených ministry hnutí ANO. ČTK Doležal Michal

Last week, Czech Finance Minister Andrej Babis ordered that the sum be paid to Volkswagen, the paper writes.

The Czech state sold Skoda to Volkswagen in 1991. Formally, the state-owned firm Prisko, which dealt with Skoda´s privatisation, is responsible for the debt.

In the mid 1990s, Volkswagen and Prisko agreed to cooperate in the exaction of 676 million crowns, which the Motokov firm owed to Skoda. Volkswagen was to get 44.6 percent of the debt and Prisko the rest, LN writes.

However, Prisko agreed on the debt settlement with Motokov in 1997 without letting Volkswagen know of it. Volkswagen then took the matter to courts. A Czech court halted the case, but an arbitration court and an Austrian court sided with the German concern earlier this year, the paper writes.

Originally, the Czech state owed roughly 150 million crowns to Volkswagen, but this sum doubled due to bad contracts and the protracted court proceedings.

Babis said previous finance ministers who did not deal with the case were to blame for the bad result of the dispute.

He told the paper that the state paid over 65 million crowns for legal services only.

Skoda Auto has over 25,700 employees and it plans to produce more than one million vehicles this year, including over 600,000 in the Czech Republic.

Skoda is considered an example of a successful privatisation: within the Volkswagen Group, the highly indebted firm has turned into one of the best Czech industrial companies.

Written by:
www.ctk.cz

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