The Czech Export Bank provided funds in the amount of CZK 8,200 million without justification

Press Release – July 16, 2012


The Supreme Audit Office (SAO) carried out an audit at the Czech Export Bank (CEB) and scrutinized nine loans in the total amount of CZK 13,200 million, which had been provided for the support of Czech export. According to the audit conclusion, over CZK 8,000 million should not have been transferred from the CEB accounts at all and loans worth CZK 4,200 million were transferred in violation of the Bank Act. Out of the nine scrutinized cases, the debtors deal with payment incapability in seven cases. In the event that they do not repay the debts, the pecuniary loss will have to be covered from the state budget.

The choice of companies that were supported by the CEB is also questionable. The most astonishing fact is that from the funds amounting to CZK 143,000 million, which were provided to 100 applicants for the export support within the period 2005–2011, CZK 19,500 million (i. e. 13.6 %) were only provided to two companies. During the loan assignment process, the CEB repeatedly committed errors of capital importance. One of the supported companies paid over 40 % of the provided funds to a subcontractor who resides in a so-called tax haven. Such a course of action cannot be considered to be aimed at supporting the Czech export.

When making decisions on the loans, the CEB violated the caution principle, which is stipulated in the Bank Act. The CEB also violated internal regulations when the supervisory board was not given important documents related to the cases that were being decided upon.

Auditors also aimed at the Ministry of Finance, which is a majority shareholder of the CEB. At the Ministry, shortcomings were also revealed. For example, the Ministry gave a loan in the amount of CZK 1,700 million to the CEB in 2010 – but these funds were meant to cover the state budget deficit, not to be loaned.

For further details about the auditing operation No. 11/11, see the following link.

Communication Department
Supreme Audit Office

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