Czech billionaire ex-PM stands trial accused of EU subsidy fraud

Former Czech Prime Minister Andrej Babis stands trial for alleged EU subsidy fraud in Prague

PRAGUE (Reuters) - Former Czech prime minister Andrej Babis stood trial on Monday over fraud accusations connected to a 2 million euro ($2 million) European Union subsidy that have marred his political career for the past five years.

Prosecutors allege that Babis, owner of a chemicals, farming, food and media empire, now held in a trust, illegally tapped the subsidy to build a conference centre near Prague before he formed his anti-establishment ANO party in 2011.

Babis has denied any wrongdoing and has repeatedly said the case against him is political.

"I am glad all will see this, my arguments against this untrue charge," Babis said as he entered the court building, according to Czech Television footage.

"It was of course politically motivated criminal investigation."

Babis, 68, is a potential presidential hopeful in an election early next year and still heads parliament's biggest party even though he sits in opposition after five parties combined in an election last year to oust him form government.

Babis may face a jail term if found guilty, although prosecutors asked for a suspended sentence and a fine. The trial is expected to last into at least mid-October, and any verdict is subject to appeals.

The allegation against Babis, the country's fifth-richest person on Forbes 2021 list, says he had hidden the ownership of the conference centre and hotel so it would qualify for EU funding meant only for small businesses.

Apart from the criminal charges, Babis was also separately found to be in conflict of interest by the European Commission as his Agrofert business group, which employs over 30,000 people and is among the biggest in the country - tapped large development subsidies while he was in power. He had denied any wrongdoing.

The Czech government withdrew some of the subsidies as the Commission said it would not reimburse them.

The opening of the trial comes ahead of a presidential election due in early 2023, where Babis is expected to be a strong candidate, although he has not declared yet that he will run. The office would shield him from prosecution during the five-year term.

Babis served as prime minister in 2017-2021, and as finance minister in 2014-2017.

Babis has also been investigated by French prosecutors over the purchase of property in the France via offshore firms, according to the Le Monde newspaper. He has denied wrongdoing in that purchase.

($1 = 0.9949 euros)

(Reporting by Robert Muller, Editing by Jason Hovet, Jan Lopatka and Alison Williams)