PRAGUE — Czech Finance Minister Bohuslav Sobotka and U.S.-backed Central European Media Enterprises (CME) have come to an agreement with regard to payment of the $353 million awarded the TV group by an international arbitration court in Stockholm.
The Czech government will deposit the money in an escrow account, releasing it from paying $75,000 in daily interest, until a separate court rules on an appeal that pols hope will invalidate the March 24 verdict. The Czechs dispute the way the arbitration panel reached its decision.
If the country wins that challenge, the money will be returned. If it loses, CME will receive the award within two days. CME prexy-CEO Fred Klinkhammer has agreed to consider other forms of payment by the Czech government.
The Czech Republic, which agreed to the pact on Monday, was found guilty of failing to protect CME’s investment in leading commercial broadcaster Nova TV under a bilateral investment treaty. The station’s license holder and general director, Vladimir Zelezny, broke an exclusive services contract with CME when he used the license to launch a rival station of the same name.
The most damning piece of evidence involved minutes from a private meeting between Zelezny and the Czech Broadcasting Council in which the parties agreed to create documents that would force CME out of Nova TV.
CME is backed by cosmetics heir Ronald Lauder and operates TV channels in Slovakia, Slovenia, Romania and the Ukraine.
Pols have been mulling how to come up with what amounts to one week’s average cost of living for each of the country’s 10 million citizens if the appeal goes against the Czech Republic.
Among the proposals are a 2% rise in value-added tax for a year, issuing bonds to raise cash or forcing the Czech Broadcasting Council and Zelezny to pay.