Blog: Five families that rule Czech Republic

Erik Best
23. 5. 2012 13:43
US journalist Erik Best writes about Five Families that control Czech business and politics
Erik Best
Erik Best | Foto: Jan Lipold

Blog - "(Czech PM) Petr Necas takes good care not to say anything that would point to the importance of Kellner, Dospiva, Komarek, and others - probably because he is well aware that they have far greater power than himself," wrote Erik Best, a US journalist and publisher of online news bulletin Fleet Sheet, in a blog written for Czech online daily

Erik Best, who has been living in the Czech Republic since 1991, detailed the influence of a handful of big business groups on the Czech Republic.

Erik Best refers to them as the "Five Families" and says they are struggling with each other for spheres of influence. The Czech Republic's Big Five are Petr Kellner (PPF Group), Marek Dospiva (Penta), Patrik Tkac (J&T), Karel Komarek (KKCG), and Zdenek Bakala (BXR).

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Five Families control growing part of economy

"It is hard to say how big part of the Czech economy is controlled by these families, but if we let aside the export market, which produces 75 percent of Czech GDP, we will learn that the share is not small. And it is growing," wrote Erik Best, explaining that J&T and PPF are the Czech Republic's second biggest electricity producers and the largest heat producers.

Kellner's PPF also co-owns the largest insurance company, it is a leading provider of consumer credit (Home Credit company), and operates two banks. It also plans to buy a gas pipeline system from RWE, and it will be probably successful, thanks to Moscow's assistance. 

PPF and KKCG also together control Czech betting giant Sazka.

"Bakala's wealth lies above all in coal mining and real estate. But he also owns Economia, one of the Czech Republic's most important publishing companies," reminded Erik Best, adding that Bakala knows how to "buy" journalists, politicians, or people from the non-profit sector.

Petr Kellner, the richest Czech
Petr Kellner, the richest Czech | Foto: ČTK

"While other godfathers focus on multiplying their assets, Bakala likes to play in the international scene and 'collect' presidents, foreign ministers and diplomats," he wrote.

In the Czech political discourse, "godfather" (kmotr) means a businessman with important political influence, rather than a mafia boss.

Wild privatization of 1990s

"That what distinguishes these Five Families from a large number of ordinary Czech billionaires, above all various little godfathers, is the origin of their wealth, their ability to keep and multiply it... Their wealth originated in the wild privatization in the 1990s, when the laws had holes in the right places and allowed to acquire large property if you had the right lawyers, judges and politicians at hand," wrote Erik Best, adding that the "little godfathers" lack important contacts and key assets such as mines, banks, insurance companies, lottery businesses, and newspapers.

He also wrote that people such as Martin Roman, Vit Barta, or Roman Janousek, who all made headlines recently due to their corruption affairs (or corruption allegations), are examples of such second-tier business players, or "little godfathers".

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"As the European crisis is getting worse and Western banks, energy holdings, developers, and industrial companies are retreating from the Czech Republic, the influence of the Five Families is increasing. It is the most significant trend we can observe in the present-day Czech Republic."

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