Especially in the Czech Republic, the influence of Andrej Babiš also grew stronger during the Klaus governments. One of the key deals he targeted in the early stages of the development of his Agrofert was the attempt to take control of the Severočeské chemické závody (Secheza).
The company was of interest to all players, who were keen to dominate the chemical industry and agriculture in the entire Central European region. The factory produced the most important intermediates for a number of other agrochemical products.
The company had superior technical equipment and unique production processes. Andrej Babiš also recognized the good qualifications of the managers in Lovosice, whom he knew from his cooperation with them when he arranged ammonia supplies on behalf of Petrimex.
It was through Petrimex that Babiš penetrated Secheza (later Lovochemie). He was represented on the board of Lovochemie as a statutory body since its change into a joint-stock company in 1993. As a member of the board and a former manager trading with Lovochemia, he recognized the advantages of the Lovosice company. He had already been working for Petrimex and was quietly planning the takeover of the company. Although this again does not correspond with today’s descriptions of the holding’s development, Babiš was raising money to take over Lovochemie long before he was officially setting up his business.
He allegedly managed to obtain a CZK 350 million loan from Komerční banka. Thanks to this sum, he was supposed to be a sufficiently credible bidder for the company in the competition announced by the National Property Fund. The defeat inflicted on Andrej Babiš in 1995 by Proferta was all the more unpleasant. The latter was willing to offer over half a billion crowns for the company.
For Babiš, who at the time was still building his empire as we know it today, this meant a hard blow. By winning the promise of lending and reversing the plans, he was playing with the confidence of the banking sector. Chemapol and Agrobanka were behind Proferta. They were outsiders in the competition, so Andrej Babiš was annoyed that the valuable factory was dominated by amateurs from his point of view. However, they did good business, developed business contracts and promised to invest about four billion crowns in new technologies.
Even more important than Babiš’s feeling that his opponent was incompetent, however, was the ownership structure that Proferta hid behind – Hospodářské služby Nymburk, Agra Střelské Hoštice and Bags, controlled by the well-known German company Carl Beiselen.
The majority shareholder, however, was Hospodářské služby, whose majority stake was managed by Pavel Švarc. It was this holder who was to be Babiš’s next rival in the fight for Czechoslovakia’s chemical wealth. The businessman, who had also briefly broken into Czech football, was fighting for a superior position in Agropol. He was therefore one of Babis’ first rivals. Miroslav Jansta can also be counted among his rivals. The businessman and lobbyist, who headed the supervisory board of Hospodářské služby from 1995 to 1997, is now known as a man who influences sports business and subsidies from the background.
Babiš did not give up on Lovochemia. He used Agrobohemie for a new attack. Through it, he took control not of Lovochemie directly, but of Proferta, the winner of the previous battle for the lucrative production plant.
Proferta has delivered on its investment promises, as committed at the time of privatisation. However, a problem arose on the capital side. The first loan repayments were delayed, and thus an opportunity for Babiš. At the beginning of 1997, Proferta was transformed into a joint-stock company, with Andrej Babiš suddenly chairman of the board. Under unspecified circumstances, Babiš’s Agrobohemie also acquired a minority stake in Lovochemia as part of the deal.
At the beginning of 1998, new representatives of the Supervisory Board and the Management Board began to rehabilitate Lovochemia. According to the official version at the time, these were people from the state-owned Unipetrol. However, the media soon pointed out that these were people close to Andrej Babiš. In May 1998, Lovochemie’s management arranged a revival loan of CZK 1.3 billion with the European Bank for Reconstruction and Development for the development of the company. However, the bank required the company to increase its share capital as a condition of the loan.
As a result, Lovochemie decided to subscribe for shares worth CZK 250 million for Agrobohemie. The company thus de facto took control of Lovochemie, while Proferta ended up in liquidation after a few months. Mixed emotions of some former managers of Proferta and Lovochemie were aroused by the fact that Andrej Babiš served as chairman of the board of directors of Proferta, Agrobohemie and Lovochemie at the same time during the general meeting in May 1998. He ruled Lovochemia through Agrobohemia and had Proferta, which was linked to an outstanding loan from the Investment and Postal Bank, liquidated.
The controversy later also led to the criminal prosecution of Babiš for his actions. Criminal charges were filed by the second largest shareholder of Proferty Bags and by the bank ČSOB, which took over the loan of the bankrupt Investment and Postal Bank. It did not like the fact that Proferta had got rid of the debt in a strange twist. Babis was suspected by investigators of misuse of information in business dealings and violation of rights in the management of foreign property. Three years after taking control of Lovochemie, the case was brought to the table of the special unit for combating corruption and economic crime. Suspicions were also investigated by the traditional criminal police. The repeatedly postponed case was eventually taken over by the future chief prosecutor Lenka Bradáčová, who was working in Litoměřice at the time. The applicant publicly promised a shift in the case and repeated serious doubts about Andrej Babiš’s actions. However, after the case was taken away from her and sent to the Regional State Prosecutor’s Office in Ústí nad Labem, the investigation fell silent and ended without result.
