Czech prosecutors drop fraud charges against Czech PM

Prague prosecutors say they have decided to drop charges against Czech Prime Minister Andrej Babis over alleged fraud involving European Union subsidies

PRAGUE -- Prague prosecutors said Friday they have decided to drop charges against Czech Prime Minister Andrej Babis over an alleged $2 million fraud involving European Union subsidies.

The prosecutors announced their decision after evaluating the police recommendation to indict Babis. They also dismiss charges against other suspects in the case.

Their actions can still be overturned by the prosecutor general.

"We'll see what happens next," Babis said Friday.

"Our justice system is independent," he said. "I'm glad about the conclusion." Babis declined to comment in detail.

The case involves a farm known as the Stork's Nest that received EU subsidies after its ownership was transferred from the Babis-owned Agrofert conglomerate of some 250 companies to members of Babis' family.

The subsidies were meant for medium-sized and small businesses and Agrofert would not have been eligible for them. Later, Agrofert again took ownership of the farm.

Prosecutor Martin Erazim said in a statement that the evidence gathered in the case proved that the farm "met the definition of small and medium-sized businesses."

Agrofert later returned the subsidy.

Babis, a billionaire populist, has denied any wrongdoing, but the charges have had a serious impact on him.

He faced a difficult task to form a government because other parties in Parliament were reluctant to enter a coalition with his centrist ANO movement

He finally created a coalition with the leftist Social Democrats that has support from the Communists, a controversial move that gave the far-left party an indirect share of power for the first time since the anti-Communist 1989 Velvet Revolution.

Massive street protests against Babis took place in Prague and across the country earlier this year, fueled by the appointment of a new justice minister who is a close ally of Babis and voted against a police request to strip him of parliamentary immunity to face the criminal investigation.

Also, a preliminary European Union report leaked in May concluded that Babis might have had a conflict of interest over EU subsidies involving his former business empire.

Another protest is scheduled for Nov. 16, marking the 30th anniversary of the Velvet Revolution.