What caused Jacques de Groote, the former CEO of the World Bank and director of the International Monetary Fund, now 90 years old, to spend the last 10 years in court? In large part, it’s allegations of fraud over his involvement with a group of Czech entrepreneurs who took an ailing coal mine, turned it around and sold it for a substantial profit. But also, because a Swiss court hired a Pole to translate Czech documents and then failed to call for the translation of more than 90 percent of the documents associated with the transaction.
To understand how this happened, it’s necessary to go back to the beginning. In 1989, the newly independent Czech Republic was trying to reboot its economy and, over the next few years, privatised most of its state-owned business, including a key asset: MUS. MUS was a huge and hugely unprofitable coal mine. Shortly afterwards, a group of entrepreneurs bought up a large number of MUS shares from a large number of individual shareholders. Eventually, the entrepreneurs ended up with a controlling stake. Their wish was to sell these on as a large block of shares, but this was not possible so they, using the Appian Group of which M. de Groote was chairman at the time, retained control and turned the coal mine around. There were some 25,000-30,000 families supported by the mine and the changes made by the entrepreneurs saved the livelihoods of these families, cemented very good relationships with the trade unions and made the Czech Republic the largest per-capita exporter of electricity in Europe.
