Former Czech premier Andrej Babis was pronounced not guilty in his long awaited trial in Prague over the alleged €2mn Stork's Nest subsidy fraud. The verdict comes only a few days ahead of the first round of the presidential election, where the opposition leader is one of the favourites, and could give his campaign a fillip.  

“INNOCENT” tweeted the billionaire populist leader from the court room as Judge Jan Sott read out the justification for his verdict. “I am very happy that we have independent justice and that the court confirmed what I have been saying and that I have done nothing illegal.”

The judge said the prosecution had not proved intent to defraud. The state prosecutor has said he will consider whether to launch an appeal against the verdict once he has read it.

Babis has accused the country's legal and political establishment of mounting a witch hunt against him over the case, which dates back 15 years, from before he entered politics. The billionaire has fought to stop the case from coming to trial since 2017, which only happened after he lost the October 2021 election in which current Prime Minister Petr Fiala rode a wave of discontent over Babis' business links to victory.

Babis leads the most recent opinion poll for voting in the first round on Saturday with 27.9%, with his most likely challenger, General Peter Pavel, just behind at 26.7%. The two highest polling candidates will go through to a run-off on January 27, a contest that Pavel is favourite to win.

In the Stork’s Nest case, Babis and his former manager Jana Nagyova – who was also cleared – were accused of trying to conceal the conference centre’s ties to Babis’ large food, chemical, and agricultural conglomerate Agrofert in order to claim an EU subsidy designed for small and medium-sized enterprises.

Anti-corruption NGOs such as Transparency International have been ringing alarm bells about the case since Babis entered politics at the national elections in 2013. The centre had originally been owned by Agrofert but was then transferred to a new company, owned by Babis' family members, with his estranged son testifying that he was never the owner and his signature was most likely forged. The judge accepted that this was probably the case but said this had no bearing on Babis' guilt or otherwise over the subsidy.

UK bank HSBC also provided a loan to this new unknown company because of its links to Agrofert, and Agrofert advertised heavily at the conference centre. In 2015 Babis was even caught on camera boasting that Stork’s Nest was his idea and was one of his best projects. Babis refused to answer police or the court's questions over the case.

The case was embarrassing for the billionaire as his main pitch when he entered politics was as an anti-corruption tribune against the country's traditional parties. But once in office Babis and his party did little to fight corruption and have also been plagued by their own series of  scandals.

Babis has already repaid the EU subsidy for Stork's Nest to try to defuse the contoversy; however he is currently refusing to repay other EU subsidies that Brussels has refused to reimburse the country for because of the conflict of interest between his political and business interests while he was premier and before that finance minister. Babis denies any conflict of interest, claiming he has no involvement in a trust in which he put his corporate holdings.

The billionaire is also being investigated for alleged money laundering in a separate case in France, in which he bought luxury properties through a chain of offshore companies. This case was brought to light in the Pandora Papers, and Babis – who denies any wrongdoing – has blamed it for his election defeat.

Last week many liberal Czech commentators expressed their outrage after the state prosecution demanded only a conditional three-year sentence and a fine of €0.4mn. 

The verdict will come as an embarrassment to the government and represents yet another failure in the legal system's prosecution of high-profile corruption cases.

“Rule of law state stands on us respecting the justice decision whether we like it or not,” tweeted Interior Minister Vit Rakusan.

Presidential candidate Pavel Fischer told the Czech news agency CTK that the acquittal does not mean that Babiš did not commit fraud, but only that the criminal offense was not proven.

He pointed out that, following the judgment, Babiš evaluates the judiciary as independent. "But if she had decided differently, she would no longer be independent? What kind of nonsense is this? With his dangerous statements about the political process, Andrej Babiš systematically undermined trust in an independent judiciary," Fischer told ČTK.