Pavel Tykač

Pavel Tykač (born 15 May 1964 in Čelákovice) is a controversial Czech businessman. His wealth is estimated at US$1.03 billion, which according to Forbes magazine makes him the fifth richest person in the Czech Republic (Forbes rankings 2015).^[2]

His wealth is based on questionable financial transactions made during the privatisation of sizeable parts of the Czech economy in the 1990s.

Education

Tykač studied at the Czech Technical University in Prague where he obtained an engineer's degree in 1987.

Early career

Tykač first got rich selling computers – his company Vikomt, which he founded with his father and several friends, imported computers in large numbers into Czechoslovakia. His company demanded payment in advance from its customers, thanks to which it could boast turnover of around a billion crowns after two years.^[3] After three years Tykač sold his share in Vikomt and with the earnings turned to speculation on the share market. He made a capital investment in Regiobanka Hradec Králové where he sat on the board. He earned another large amount of money when he sold his share in Regiobanka to IPB which was then looking for a bank for its mortgage programme. It was the CZK 300 to 350 million that he earned from the sale of computers and the profit from the purchase and quick sale of his share in Regiobanka that formed the founding capital for the start of Motoinvest. The Motoinvest financial group had originally experienced astronomical success and became the swift moving fish in the backwaters of early Czech capitalism under different owners. The company was founded in 1991 for the purpose of trading in securities. It was established by nuclear physicist and lawyer Aleš Tříska, the brother of the co-author of Czech voucher privatisation, Dušan Tříska.

In 1994 Motoinvest was purchased by Tykač’s company a. s. Tara, which became its 100% owner – at that time Motoinvest had already had five owners.

Tykač and co. entered into the financial markets as amateurs – none of them were an economist. They included electro-technician David Knop-Kostka, scientist Libor Sadílek, and mathematician Radek Peleška. There was also Jan Dienstl who has continued to work with Tykač to this day – he was an engineer. Tykač was the central figure in Motoinvest (he acted as its general director), but it was later shown that he had an influential advisor. Svatopluk Pokáč was the post-Velvet Revolution deputy chairman of the federal government and until 1989 the head of the State Bank of Czechoslovakia. It was he who helped the non-economists and “boys”, as Tykač and his colleagues were called, earn the big money which later became the basis of their wealth.^[3] The company, with ownership of hundreds of millions of crowns, thus entered the market with plans to build a strong grouping that would amass the biggest possible package of shares in funds and businesses that were controlled primarily by state-owned banks.

The media, however, pointed out that the nearly CZK 4 billion which the company was able to invest in shares after only two years was a suspiciously large sum – and speculated that Motobanka could also have other undeclared sources of money than only its profit from the sale of Vikomt and Regiobanka. These included, for example, investors linked to Liechtenstein citizen Kurt Franz. Tykač acted as an executive in his company Atlantic, which dealt in real estate. Given that the boom in property had quickly faded, Atlantic according to Tykač never began to operate. Interpol, however, investigated the Liechtenstein owner of the company CTC, Kurt Franz, and the Swiss lawyer Sergio Bossi and their possible links to Liechtenstein companies that were supposed to have been used for laundering dirty money and cooperating with the mafia. But such claims have never been proven. Tykač later purchased Atlantic from CTC and according to Dienstl became its sole owner.^[3]

Criminal investigations

Tykač is the effective owner of Czech Coal with 50% of its shares. He originally purchased a 40% share in the company in spring 2006 and then quickly increased that share to 49% for allegedly nearly CZK 10 billon.^[4] Tykač purchased the additional 1% from his partners Petr Pudil and Vasil Bobela in 2009.^[4]

Apart from his holding in Czech Coal, Tykač also operates on the real estate and financial markets. He has been described as “a person with the reputation of an unscrupulous player and a secretive pirate of Czech business comparable to Gordon Gekko …, professing greed as the highest virtue”.^[5]

His earlier activities on the financial market in the 1990s included the acquisition of CS Fund, the asset manager of three smaller investment funds, which Tykač divested himself of just a few weeks before it was ‘tunneled’ or defrauded in March 1997.^[5] The most valuable acquisition of his investment company, Motoinvest, established in 1991, however, was Agrobanka. It was this company that financed most of Tykač’s activities, which before long led it to the brink of ruin as the bank was unable to meet its liabilities, leading to the intervention the Czech National Bank to rescue its clients by pumping CZK 20 billion into it.^[5] Tykač also acquired shares through Motoinvest in other banks whose capital was subsequently passed on to companies and funds linked to Tykač whereupon those banks also went bankrupt as a result of these transactions, e.g. Kreditní banka Plzeň, and Ekoagrobanka. As a result, he is often called "the pest of the capital market" in the Czech Republic, an appellation which he failed to have the Czech courts prohibit the magazine Respekt from using in connection with his person.^[6]

Tykač was investigated by the police in 2006 over the tunneling of CS Fund, but the prosecution was later suspended. Many of his former associates^[7] have been convicted of financial crimes and have often ended up behind bars, although Tykač himself has always remained at liberty.^[8] Investigations against him, however, continue.^[9] In 2012, František Bušek alleged in court that he assisted Tykač in defrauding CS Fund of CZK 1.23 billion. Tykač said the allegation was the result of an earlier failed attempt by Bušek to blackmail him.^[10] Tykač kept a very low profile from the late 1990s only to re-emerge in 2006 with his purchase of shares in Czech Coal, since when he has aggressively defended the price demands of the company and lobbied for the cancellation of the brown coal mining limits in North Bohemia, beyond which lie huge coal reserves.^[5]

Further examples of Tykač’s alleged unscrupulousness include posting letters to the wives of shareholders who were refusing to sell him a Czech Coal competitor, Sokolovské uhelné, urging them to talk their husbands into the deal, and the way he dealt with a run-down but listed residence he owned in the exclusive Prague quarter of Vinohrady – it mysteriously caught fire twice and was eventually demolished without permission.^[5]

References