The government –or rather the entire political establishment, has decreed that its relationship with Appian has been at arm’s length despite mounting evidence to the contrary.

An arm’s length transaction is a transaction in which the buyers and sellers of a product act independently and have no relationship to each other. ČEZ has concluded that the arm’s length principle was adhered to in all its transactions with Škoda Power before that company was sold by its owner, Appian, to Doosan in 2009. The majority shareholder, represented by the finance minister, has accepted this conclusion. So too, it appears, has the prime minister.

There is no good reason to believe, if Czech Railways and the City of Prague were to conduct their own, internal audits of their many transactions with Appian’s other big earner, Škoda Transportation, that they would reach a different conclusion. The government –or rather the political establishment as a whole, has decreed that Appian is at arm’s length despite mounting evidence to the contrary.

I can imagine that Appian owns a great many companies we do not know about because its title is hidden behind nominee shareholders and trustees in offshore jurisdictions. Take, for example, the obscure construction firm, CEEI, which strikes me as a classic Appian entity.

To remind the reader, this company, which to the best of my knowledge had no track record in the nuclear storage construction business whatsoever, was commissioned by Daniel Beneš of ČEZ in 2008 to build the spent fuel facility at NPP Temelín for Kč 1.5 billion. An earlier project prepared by the Czech Nuclear Research Institute, which is part-owned by ČEZ, priced the facility at one third of CEEI’s bid price. And yet Beneš selected CEEI. The cost of an equivalent facility at NPP Isar in neighbouring Bavaria completed a year earlier was Kč 810 million according to its owner E.ON. And yet Beneš still selected CEEI.

The cost deltas between the facilities at NPP Isar and NPP Temelín, and between CEEI’s winning bid price and ČEZ’s own price estimate prepared by the Czech Nuclear Research Institute are both so great that we must assume one of two things: Either the Temelín facility is not comparable to the Isar facility or indeed to the facility that ČEZ itself had planned –which seems odd. Or the contracted price was much higher than it needed to be, being the true cost plus a lot on top –presumably for the owners of CEEI.

The size of the delta and the degree of secrecy surrounding CEEI, whose owners remain hidden to this day behind a raft of Cypriot-based nominee shareholders and trustees, together make it harder to accept that the contractual relationship between CEEI and ČEZ was really held at arm’s length, in other words that ČEZ’s transaction with CEEI was conducted no differently than it would have been with an arbitrary third party.

The links between ODS and CEEI are perhaps coincidental. The firm's manager is Jiří Kovář, former deputy chairman of ODS and head of the Cabinet Office under Václav Klaus' prime ministership in the early 1990s. A certain Rostislav Senjuk is listed on the Cypriot public records as a director of two of the half dozen or so shell companies behind Panweco Ltd, the company listed in the Slovak commercial registry as the owner of CEEI. Is this the same Senjuk who worked for Škoda Plzeň twenty years ago and who is better known these days as the leader of an ODS proxy party called Soukromnici, which is co-chaired by Bedřich Danda, the current deputy trade & industry minister?

If it is the same man, shouldn’t deputy minister Danda ask his party colleague Senjuk to tell him who owns CEEI, and then inform his colleague in government, Temelín Special Envoy Václav Bartuška? It might save considerable international embarrassment for ČEZ and for Daniel Beneš, whose decision it was to hire CEEI. Berlin and Vienna have little concern in how Czech Railways chooses its rolling stock. But matters nuclear are altogether different. It is very much in the Czech republic's interest to bolster the confidence of western neighbours in its ability cleanly to manage the doubling in size of NPP Temelín.

And yet, in Prague, even if it were to be shown that it is Appian’s capital behind CEEI, which seems plausible knowing all we now know about Appian’s once secret offshore structures, we should not expect the finance minister to do anything more than take up his default position: Appian is at arm’s length because ČEZ, Czech Railways and the City of Prague say so. And indeed, what else can he say as the majority shareholder in ČEZ?