Key Investments — an opaque brokerage now under investigation by the anti-corruption police and Czech National Bank (ČNB) regulators — has returned to state-owned forestry company Lesy ČR the Kč 69 million remaining in its portfolio, Lesy ČR director Svatopluk Sýkora told Czech Position.
Lesy ČR, which had money invested through Key Investments for seven years, requested its money back from the brokerage in December 2010. Spokesman Zbyněk Boublík said that contrary to reports in some media, Key Investments did not manage all of Lesy ČR’s investments.
“The reality is that Lesy ČR used the services of Key Investments from 2004 to December 2010 solely to manage bonds of České dřevařské závody Praha a.s. The volumes of finances changed over time, but never exceeded Kč 84 million,” Boublík said. The Kč 69 million in bonds that the forestry company still had on its account with Key Investments has been returned, Sýkora said, adding that Lesy ČR no longer use the brokerage’s services. ‘It is a typical example of how dangerous the links between politicians and the so-called entrepreneurial godfathers are for Praguers.’
Apart from Lesy ČR, Key Investments managed investment portfolios of three Prague district administrations (Prague 6, 10 and 13) worth Kč 650 million in total. Ivan Mašek, a Prague 6 councilor from the opposition party TOP 09 , said that the district’s financial committee decided “to immediately divest all resources from Key Investments” at a meeting last week called by TOP 09.
“[But] I have serious doubts that it can be done without incurring losses. It is a typical example of how dangerous the links between politicians and the so-called entrepreneurial godfathers are for Praguers,” Mašek said.
Czech Position has received no answer from Prague 10 and 13 officials as to how they will proceed regarding their portfolios now in the hands of Key Investments. However, as for Prague 13’s portfolio, representatives of opposition parties in the district assembly already know the composition of the investments and at a public hearing on Wednesday (March 9), they will lobby District Mayor David Vodrážek (Civic Democrats - ODS) to act.
Key Investments minority shareholder Daniel Brzkovský is due to attend; he will apparently attempt to dispel doubts about the value of of Prague 13’s Kč 200 million portfolio under the management of Key Investments.
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