The umbrella organization of associations of individual sports, the Czech Sport Association (ČSTV), has announced that it is joining the legal challenge aimed at annulling the validity of the sale of the Sazka lottery firm last year to the PPF Group and KKCG Group, owned by the billionaires Petr Kellner and Karel Komárek, respectively.
“We’re convinced that the joint efforts of the sports organizations will markedly raise the chances for the return of at least part of the Sazka assets back into the hands of Czech sport. We do not deny, nor have we closed our eyes to the mistakes that we made in the management of Sazka in the past, but the way in which we lost all of our assets in Sazka has not precedence in a legal state,” acting ČSTV chairman Pavel Kořan said Friday in a press release.
Sazka was forced into administration in May 2011 after it failed to keep up repayments of loans extended to build the indoor sports and entertainment arena in Prague’s Libeň district. Sazka, the profits from which were used to finance Czech sport until they were all diverted to finance the arena, was subsequently declared bankrupt and sold to the Kellner’s PPF Group and oil tycoon Komárek’s KKCG Group. The ČSTV still claims to be the majority shareholder of the firm Sazka, though all the firm’s assets are now in the hands of PPF and KKCG.
The ČSTV still claims to be the majority shareholder of the firm Sazka, though all the firm’s assets are now in the hands of PPF and KKCG.
At the end of October 2011, Ernst & Young valued Sazka at Kč 3.57 billion, but the bank Česká spořitelna, which was a major creditor of Sazka, launched legal proceedings challenging the evaluation and came up with its own estimate of roughly Kč 4.5 billion. The bank then dropped its legal challenge and sold its receivables from Sazka to KKCG. PPF and KKCG paid Kč 3.81 billion for Sazka.
Prior to the auction, the investment firm Penta put forward an offer of Kč 4.65 billion, but Sazka’s administrators rejected the offer on technical grounds. Penta claims the administration commission, headed by Josef Cupka, was biased and acted in the interests of PPF and KKCG. Penta has also launched a legal challenge against the sale of Sazka, which is on-going.
Two minority shareholders in Sazka, the Czech branch of Sport for All (ČASPV), and the Association of Sports Groups and Clubs (ATJSK), are also participating in the legal challenge. ‘We consider it to be our duty to join the other legal complaints ... We are confident that the courts will not be able to ignore the wishes of the shareholders...’
“We consider it to be our duty to join the other legal complaints that have already been lodged. We are confident that the courts will not be able to ignore the wishes of the shareholders and a whole series of facts which show that bankruptcy proceedings and the subsequent sale of the company were in breach of the law,” the chairmen of ČASPV and ATJSK, Jiří Laurenc and Jaroslav Němec, said in the press release.
The sports associations claim the administrators did not have the legally required consent from them, the shareholders, and also several creditors to sell Sazka. They point out that the company’s assets were not sold to the highest bidder and, like Penta, claim the auction of Sazka’s assets was non-transparent.
The sports associations say they are lodging criminal complaints against the chief administrator who oversaw the sell-off, Josef Cupka, and Aleš Hušák, the former CEO of Sazka.