The Czech media continue to untangle the web of direct and indirect connections between opaque offshore companies, the law firms that represent them, and the individuals actually benefiting from contracts agreed by Prague’s transport company former CEO, Martin Dvořák — possibly including his mother (a police investigation into the family’s finances is underway).
Czech Position has already reported on the link between the security agency Samcor and businesswoman Jana Lütken; now this publication has unraveled additional threads in the yarn of intrigue around the city-owned company, DPP, involving a small circle of Prague lawyers, lobbyists and entrepreneurs — and specialists in doing business via the Caribbean.
To best understand the extent of the connections, many of which are now being investigated by anti-corruption police due to suspicions of fixed tenders and kickback schemes at the Prague transport company (DPP), let us first review the individual cases known thus far and the companies they involve.
- The case of the “overpriced tickets”: The Virgin Islands-registered company Cokeville Assets Inc. brokered a 2007 contract between DPP and the private Czech printer Neograph toproduce metro, tram and bus tickets; Cokeville collected Kč 0.17 for each. In December 2011, the Endowment Fund Against Corruption (NFPK) in December made public a 2006 contract between Cokeville and Prague lobbyist Ivo Rittig, who was represented by David Michal of the law firm Šachta & Partners. The NFPK concluded that some Kč 73 million was transferred from a Cokeville account to one controlled by Rittig, calling him the beneficiary of the dodgy deal; Transparency International said it smacked of “kickbacks” to DPP management. The head of the organizational seat of Cokeville was another lawyer, Peter Kmeť, while Jana Lütken was director of the offshore company at the time of the 2006 contract.
- The case of the “turnstiles”: The NFPK in December last year also published a contract (from 2009) between DPP and the company ALSEDA — also signed by Peter Kmeť— for advisory services relating to the installation of turnstiles in the Prague metro. ALSEDA is owned by the Swiss company Eurozeta, which was managed by Jana Lütken from 2005 to 2010.
- The case of the “television monitor” patent: City-owned DPP has been paying the company Bitmedia a license fee for a patent on the big screens hung on the walls of the Prague metro stations — although there is no exclusive technology whatsoever involved. The chairman of the board at Bitmedia is Peter Kmeť. Meanwhile, a third of the shares in the Czech company are in the hands of Mavex Group Incorporated, yet another firm registered in the Virgin Islands.
- The case of the “Maderia villa”: Marie Nováková, the mother of ex-DPP chief Martin Dvořák —who was pushed to by Prague mayor Bohuslav Svoboda to resign this autumn, reportedly due to suspicions of widespread corruption during his tenure — bought a villa located on the grounds of a luxurious golf resort on the Portuguese archipelago of Maderia in 2009. On the very same day that Nováková secured a €1.6 million loan of for this purpose from Unitex International Capital, that Hong Kong-registered company entered into a loan agreement with Mavex Group Incorporated — both of these offshore companies were represented by David Michal of the law firm Šachta & Partners. Nováková also bought a “suspiciously cheap” villa in Hanspaulka, a posh area of Prague’s Dejvice district that is home to a number of foreign embassies, from Michal’s company Future Earnings through a firm in which she is co-owner, HK Development.
Samcor’s Caribbean credit
According to Czech Position’s information, also figuring in to the web of connections around the city-owned transport company is the security agency Samcor, owned by Prague businessman Samuel Korbíni. The agency, founded in 1999, has never published an annual report, yet though it has secured contracts from public companies. Samcor’s clients include DPP and TV Prima — a commercial broadcaster also previously headed by Martin Dvořák.
The collection of Samcor documents obtained by this publication show that the agency obtained a Kč 6 million loan in September 2008 from Mavex Group Incorporated and negotiated, once again, by David Michal of Šachta & Partners. Samcor’s clients include DPP and TV Prima — a commercial broadcaster previously headed by Martin Dvořák. TV Prima has refused to disclose details of its contract with Samcor, which ran from 2007 to 2008 (Dvořák became head of DPP in April 2007).
To recap: Samcor borrowed money from the same Caribbean offshore (Mavex Group Incorporated) as did the Hong Kong-registered firm (Unitex International Capital) that lent money to Dvořák’s mother, Marie Nováková, to buy the villa in Madeira. Mavex owns Bitmedia, which collected money from DPP for the “television monitor patent.”
Dvořák chalks up these connections to “coincidence” while Michal characterizes the transactions as completely above board, and points to an alleged smear campaign against the ex-DPP chief being waged by his ex-wife, who has been working with the anti-corruption group NFPK. As has been reported by the news server Aktuálně.cz, the police are now investigating the Dvořák family’s finances.
Caribbean adventures of a Danish Czech
Jana Lütken, a Czech with Danish citizenship, also figures in the Samcor story. In June 2010, nearly two years after the agency received the loan that was negotiated by the lawyer David Michal, a “waiver of lien” agreement was signed. Among other things, from the document it is clear that the borrower (Samcor) did not repay the lender (Mavex Group Incorporated) the entire Kč 6 million, yet both signed off on it. This time, however, it was Lütken and not Michal acting as the director of Mavex.
Lütken appears to be a specialist in doing business via Caribbean offshore firms; as previously noted, she was at one time listed as director of the Virgin Islands firm Cokeville Assets Inc. that earned Kč 0.17 from every Prague metro, tram and bus ticket printed. Jana Lütken also figures in the 2008/2009 emission allowances scandal in Slovakia.
Her name also figures in a scandal in neighboring Slovakia from 2008 and 2009 relating to the sale of surplus emission allowances, back when Robert Fico of the center-left Smer party was prime minister. The allowances were sold at below market rate to the US-registered company Interblue Group, of which Lütken was managing director. Two of Fico’s ministers resigned after the story became public. As of January 2010, she was one of two owners of Interblue Group.
The daily Lidový noviny asked the former DPP chief if he thought that the “coincidental” linking of these firms was part of the ongoing “coup” at Prague City Hall (led by Mayor Bohuslav Svoboda, who gave him his walking papers).“Everything relates to everything, so it probably has a political context,” Martin Dvořák said. “In short, everything that came before [contracts between the city or city-owned companies and other parties] was wrong and from now on it will be wonderful.”
See related articles:
Mother of ex-DPP chief linked to another firm gaining from son’s deals
Police probing ‘suspiciously cheap’ sale of villa to ex-Prague transport firm CEO’s mother
Prague transport firm cancels ‘suspicious’ ticket contract