Andrej Babiš’ questionable investment partner

by Kamila Plzáková, investigace.cz

Since being ousted as prime minister in the 2021 Czech parliamentary elections, now-MP Andrej Babiš has made investments in Slovenia. His Hartenberg Holding, a Czech-based investment company, teamed up with the Slovak company Corwin SK to purchase a large piece of land in Ljubljana, Slovenia, for more than 25 million euros. Ten percent of Babiš’s Slovak partner is owned by Anna Bubeníková, who gained infamy for her role in the Gorilla corruption scandal.

This article was originally published in Czech on investiagace.cz.

A project to redevelop the property purchased by Babiš’s company and its Slovak partner in the Slovenian capital was initially proposed in 2014. According to the plan, more than 550 residential units are slated to be constructed here. In addition, 145,000 m2 are set aside for commercial units, such as shopping and health care buildings, as well as for a museum. There are also plans to build a park with sporting facilities and a nursery school. The dominant features of this new neighbourhood will be two skyscrapers topping out at more than 30 floors.

From privatization to real estate development

Anna Bubeníková is publicly known in Slovakia for her connection to the Gorilla scandal. She previously chaired the board of directors of the National Property Fund of the Slovak Republic, where she took part in the process of privatizing property owned by the Slovak state. She held this position for six years, until the government dismissed her for her connections to the Gorilla scandal. Bubeníková then disappeared from the public eye and began focusing on real estate development.

What is the Gorilla scandal?

In 2005, the Slovak Information Service (SIS) wiretapped a flat in Vazovová Street in Bratislava based on a tip from SIS analyst Peter Holúbek who lived in the neighbouring flat. Holúbek noticed that luxury cars were often parked in front of his building and that prominent businesspeople and politicians were frequently visiting his neighbour, including former prime minister Robert Fico, then-current economic minister Jirko Malchárek, and the chairwoman of the board of directors of the National Property Fund, Anna Bubeníková. Conversations between politicians and Jaroslav Haščák, co-founder and co-owner of Penta Investments, focused on privatization and the alleged manipulation of this process to the benefit of financiers. Commission payments were also agreed upon in the flat.

The wiretapping operation was codenamed Gorilla. At the end of 2011, someone anonymously published transcriptions of audio recordings that allegedly came from the Gorilla file. Because the actual recordings were not found at that time, the politicians involved in the affair denied their existence, referring to them as “alleged recordings”. The real recordings, or their copies, were discovered by the police in 2018 in the house of Marian Kočner, when they were searching his home in connection to the murders of Ján Kuciak and Martina Kušnírová, but instead found evidence related to other crimes, such as those committed as part of the Gorilla scandal.

Last year, the real estate development company Corwin confirmed that Bubeníková has been a minority stakeholder owning 10 percent of the firm since 2017. She received her share as a reward for “quality project management” at the company. The Slovak version of Forbes magazine has quoted Bubeníková claiming this is common practice at Corwin: “This manner of rewarding employees has been in place since our company was founded. Therefore, the ownership structure has changed many times over, as minority shareholders leave and are replaced by others.”

The links connecting Bubeníková to Corwin

Bubeníková’s name is nowhere to be found on Corwin SK’s listing in the Slovak Business Register. Likewise, she does not appear as the owner of any of the companies that manage projects that Corwin SK currently works on or has worked on in the past. Other companies instead fill in here: the Slovak-based Real Estate Investment Cooperative (Realitné investičné družstvo) and the Czech Real Estate Investment Holding (Realitní investiční holding).

Both are shareholders in several of Corwin’s businesses in Slovakia. The Real Estate Investment Cooperative appears in the business register four times, and Real Estate Investment Holding, once. Both companies belong to Anna Bubeníková. Bubeníková is listed as the sole shareholder of the Slovak-based Real Estate Development Cooperative, which is, in turn, the sole shareholder and depositor of the Czech holding.

The executive director of the Czech-based Real Estate Investment Holding is Milan Hrbek, who has been associated with Anna Bubeníková in the past. In 2012, he acted as her legal counsel when she demanded the former Slovak minister of the interior, Daniel Lipšic, apologize for expressing his suspicions that Bubeníková had rigged a bid in favour of the Penta group, which was represented by Jaroslav Haščák, one of the main actors in the Gorilla affair. As the audio recordings made as part of the investigation indicate, he was also Bubeníková’s lover.

Babiš and Hartenberg on the scene

The land that Babiš and Bubeníková have invested in was originally owned by the Slovenian company CEEREF, which this year sold it to CC Koppa LLC for a sum exceeding 25 million euros. CC Koppa was established by Slovak investors this past March and officially belongs to Corwin’s Slovenian branch, Corwin SI. CC Koppa’s other shareholder is Hartenberg Holding, which is directly connected to Andrej Babiš’s investment activities.

Hartenberg is owned by Babiš. According to its website, the company focuses “on investments in assets in the Central European Region, primarily [in the] Czech Republic, Slovakia and Poland.” Its portfolio includes the largest Czech seller of underwear, Astratax; the florist chain Flamengo; and the Polish company Good Food Products.

Hartenberg and Corwin SK began collaborating in late 2021. According to the CFO of Corwin SK, Róbert Mitterpach, both companies share the goal of becoming “an international green investment platform. We believe this partnership will be the first step towards fulfilling this goal.”

According to the Slovenian Business Register, both companies split CC Koppa’s equity capital fifty-fifty. Both Corwin SK and Babiš’s Hardenberg own shares valued at little more than 3,600 euros. The 25 million euros for the land is to be paid in two installments; the transactions have not yet been made.

When asked why Corwin SK decided to partner with Andrej Babiš’s firm, company spokesman Michal Hájek replied, “Like virtually all developers, CORWIN develops projects that are funded by a combination of our own and external resources. Some of those external resources include investments by third parties. This is the case of Hartenberg Holding. As an investor, it was attracted by the potential it saw in our sustainable projects, which take an innovative approach to environmental protection.”

Neither Hartenberg Holding nor Anna Bubeníková immediately responded to our requests for comment.

Yet another in a long line of ambitious projects

According to an announcement made by Hartenberg last year, the company plans to collaborate with Corwin SK on at least four other real estate development projects in Slovenia. For Corwin, this is part of an ongoing trend as, according to the company’s owner, “[we have] revitalized many abandoned industrial sites and completed 11 unique projects.”

Ground will be broken on one of these projects, Vilharia, at the end of this year. This will be Hartenberg and Corwin SK’s first joint real-estate development project, the construction of administrative buildings in Ljubljana that will stand directly next to the main train station. All these mentioned projects, which are now partly funded by Andrej Babiš, are located less than a kilometre from each other.

Cover photo: Former Czech Prime Minister Andrej Babis arrives at his trial for alleged EU subsidy fraud at the Municipal Court in Prague, Czech Republic, September 12, 2022.,Source: David W. Cerny / Reuters / Forum

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