Czech Energy under control: case recap

A few weeks ago, irozhlas.cz published an interview with the current director of Energie pro, a company that came to public attention through the still-unresolved Energy under Control case. Let us recap it.

The Energy under Control nonprofit

The public-benefit company was established in 2011. Three years later, it launched a project offering mayors of municipalities and towns favourable energy supply deals. In some cases, EPK acted as an intermediary, while in others it directly served as the manager of supply points.

As it was a public-benefit company, engaging in commercial activities was contrary to the law; however, owing to legal loopholes in the contracts, it was certainly not operating as a nonprofit.

EPK fell under the joint-stock company West trade a.s., as Czech Television pointed out in its Reporters Without Borders programme, and in 2015 EPK transferred money from the nonprofit sector to this joint-stock company.

Leading figures from KDU-ČSL, who recommended EPK to other municipal mayors, also helped boost the project's popularity. At first, the entire project worked well, but over time the company stopped communicating, money disappeared and municipalities began to fear what they had actually signed.

In 2015, EPK drew the attention of Czech Television journalists and the Oživení civic association. However, the company's management refused to communicate and routinely denied the allegations. According to the aforementioned Czech Television report, journalists made key findings regarding contracts in which EPK did not specify the services municipalities and towns would receive; moreover, EPK sought multi-year commitments from mayors.

Between 2016 and 2017, EPK went bankrupt, leaving debts of roughly 162 million crowns. The main injured party was Amper Market, which supplied EPK with electricity; other parties included the municipalities and towns themselves, bringing the total to around 400 creditors.

Police began investigating EPK and its main representative, David Tejml, at the end of 2015. Tejml had previously been prosecuted for electricity fraud and had an extensive criminal record.

The entire case dragged on until 2017, when the first charge against Tejml was brought. What had been an ambitious project and a major draw in municipal elections ultimately became a farce in which several million crowns disappeared.

Even the political leaders who had previously lobbied vigorously for the project distanced themselves from EPK. Creditors, meanwhile, questioned the police investigation, which began dealing with the case too late. Tejml cleverly funnelled money from EPK into his other companies. The first charge of embezzlement was followed by another: failure to cooperate with the insolvency administrator.

The absurdity of it all

While the investigation dragged on, Tejml denied everything and transferred money to other companies. Moreover, before the case came to a head, he reassigned contracts belonging to EPK to Energie pro. How was that even possible? The mayors gave EPK power of attorney, which later signed and transferred the contracts to Energie pro, which began demanding that the obligations be met. However, Energie pro disputes this claim and, according to an interview its owner Vítězslav Fiala gave to irozhlas.cz, this was not a reassignment but the selection of a company as an advantageous electricity supplier, which is entirely legal.

Resolution

The entire EPK case has dragged on for roughly five years, with both EPK's creditors and Energie pro seeking money. The mayors are defending themselves while acknowledging that they will probably never see the lost money.

David Tejml was charged in 2019 with harming a creditor, after police reclassified the original prosecution. Energie pro acquired the package of EPK contracts and is suing municipalities and towns to demand their fulfilment; it is also considering selling the claims to another party. The nonprofit project, which promised much, became a farce from which everyone would rather run away.

The protracted case shows us opportunism, political lobbying and an energy business affair that has still not reached its conclusion. Whether all those involved have learned from it remains a question.