HOMEPAGE

Business

 

Czech billionaire’s CPI sold CZK 14 bn in perpetual bonds a day before CZK 70 bn lawsuit filed in NY

 
photo:  (radio.cz)
 

Czech billionaire developer Radovan Vítek’s CPI Property Group completed the sale this week of 550 million euros (CZK 14 billion crowns) in 4.9% bonds, a day before a CZK 70 billion lawsuit was filed against the him, the company and others in a US District court in New York over alleged fraud.

 

Trading in the perpetual (no maturity) bonds, which were arranged by Goldman Sachs, Bank of China and others, began on Thursday in Berlin, the news server E15.cz reports.

Perpetuity bonds are associated with a higher risk for investors because their settlement in the event of the issuing company’s collapse take place only after senior creditors, such as banks or holders of conventional bonds, are paid.

On Wednesday, a New York New York hedge fund and Czech investment firm, Kingstown Capital Management LP and Investhold Ltd., filed a lawsuit accusing Vítek of engaging in a racketeering scheme spanning a decade.

Vítek’s CPI said in a statement it categorically denies the allegations in the lawsuit filed by Kingstown and Investhold. It said CPI Property Group and related entities are currently engaged in litigation initiated by Kingstown in Luxembourg.

“The filing of the complaint in the United States is merely another attempt by Kingstown to seek inappropriate remedies and to exert unlawful pressure” on CPI, the company said in a statement published on its website.

Investhold is an offshore vehicles of Marek Čmejla, a Czech citizen, and Jiří Diviš, a Swiss citizen of Czech origin. They claim Vítek used a web of shell companies and “straw owners” to gain control of a Luxembourg-based real estate development company in which a Kingstown unit held a substantial interest. The CPI founder then sold the most valuable assets at “distressed prices” to entities he secretly controlled, the lawsuit alleges.

CPI notes that both men participated in the controversial privatisation of Czech coal mining Mostecká uhelná, the subject of long-running criminal proceeding over alleged asset-stripping and various financial crimes.

In this regard, “Mr. Čmejla and Mr. Diviš were convicted of fraud and money laundering in Switzerland in 2013,” CPI said.

“In the local Czech press, Investhold has in the past claimed that it had a partnership with our primary shareholder, Mr. Radovan Vitek. This position has no merit. The claims are further based on the allegations that Mr. Vitek engaged in certain financial transactions, but there is no factual basis or grounds for these claims. Neither is there any basis for plaintiffs’ claim that Mr. Vitek engaged in criminal activity.”

Vitek is worth about $2.3 billion, according to the Bloomberg Billionaires Index. His company CPI Property Group SA is also named in the suit, filed under the RICO racketeering act, as are J&T Banka, Milada Malá (Vítek’s mother), former Orco CEO Jean-Francois Ott. Kingstown is owned by two Czech entrepreneurs: Marek Čmejla and Swiss citizen Jiří Diviš.

 
 
Author: Český rozhlas Radio Praha
 
Added: 12.04.2019
 
 
 

Related articles

 
Business
 
 

Prague Airport’s Terminal 2 to be...

Prague’s Václav Havel Airport is set to expand its second terminal within the next decade under major...

 
 
Business
 
 

Launch of new toll system likely to...

The launch of the new electronic toll system on Czech highways at the beginning of December can cause...

 
 
Business
 
 

Škoda unveils 4th-generation Octavia...

Škoda Auto has unveiled the latest version of its best-selling Octavia model, due to roll out on the...

 
 
Business
 
 

ČSÚ: Growth in Czech hotel stays...

The number of hotel guests rose by 3.1 percent year-on-year to 17.3 million people from January through...

 
Most favourite

History of Czech fine art

What happened in the realm of fine art at the very beginning of the Czech…

Climate

The Czech Republic is a landlocked country located in moderate geographical…

The most significant current discoveries

During the last decade, Czech science has made many revolutionary discoveries…

Czech language

The Czech language belongs to the group of West Slavic languages. From another…