By John Miller
ZURICH (Reuters) - The Czech Republic can seek hundreds of millions in funds seized by Swiss authorities from bank accounts linked to the disputed privatisation of one of the nation's coal mines two decades ago, Switzerland's highest court said on Friday.
The sale of lignite miner Mostecka Uhelna Spolecnost (MUS) became one of the biggest Czech post-communist privatisation scandals, among a string of murky disposals of state-owned companies.
Five executives convicted of money laundering and fraud in the case had been accused of using a web of Swiss bank accounts to launder cash linked to the deal. Prosecutors said they used the mining company's own money to buy its stock before buying the remaining stake cheaply from the Czech government.
Swiss authorities seized more than 660 million Swiss francs (£500.5 million), giving them jurisdiction over the case that delivered its verdicts in 2013.
The Czech Republic had originally been excluded by the Swiss Federal Criminal Court from intervening as a private party after missing judicial filing deadlines relating to the case, despite saying it had been damaged by the MUS deal.
The Swiss Federal Tribunal on Friday directed the Swiss criminal court to now take up the Czech claims.
"The Czech Republic should have been allowed to intervene because it had made a claim as a damaged party that it was entitled to be reimbursed money that had been seized," the tribunal's judges wrote.
On Friday, Prague said it would review the Swiss judgement to evaluate its next steps.
"The Czech Republic succeeded at the Swiss Supreme Court with its complaint and will be admitted ... as a damaged party," the Czech Finance Ministry said in a statement. "The Czech Republic will therefore claim damages in the dispute."
The tribunal, in Lausanne, also said its judges had rejected most of the appeals lodged by the five former MUS managers seeking to challenge their convictions four years ago in which they received prison sentences of 36 months to 52 months and financial penalties.
It did direct the lower Federal Criminal Court to reconsider its fraud conviction of a former International Monetary Fund official, Jacques de Groote, a Belgian financier. He was accused of being enlisted by the managers to convince the Czech Republic that their stake in MUS belonged to a foreign investor, in order to convince the country to sell them the rest of the company.
De Groote, now 90, was originally found guilty of helping the five Czech managers of MUS illegally gain control of the state-controlled company between 1997 and 2003. He was fined. The defendants said they had done nothing illegal.
On Friday, the tribunal said the lower criminal court must reconsider if de Groote, who served at the IMF from the 1970s to 1990s, had acted intentionally in the privatisation scheme.
De Groote could not immediately be reached for comment on the ruling through his lawyer on Friday.
MUS now has different owners, with its name changed to Czech Coal and Severni Energeticka.
