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On a cool June day in 2016, as Britain reeled from the outcome of the Brexit vote, a private jet soared into the skies from RAF Northolt, charting a course for Moscow.
Onboard the 37-seater Embraer ERJ was the billionaire Daniel Křetínský, nicknamed the “Czech Sphinx” because of his low public-profile and inscrutable approach to commercial negotiations.
Eight years later, Křetínský is on the verge of clinching a deal that would represent a landmark triumph even for him: the £3.6bn takeover of Royal Mail’s parent company, International Distribution Services (IDS).
The only thing that could stop the Czech businessman from acquiring Britain’s 508-year-old postal service would be an intervention from the UK government, which has been reviewing whether the deal poses a risk to national security interests.
Křetínský has publicly condemned Russia’s invasion of Ukraine and, according to reports, the British government is minded to approve the Royal Mail takeover.
If that happens, ministers can expect to face further scrutiny of their decision.
Today, the Guardian can reveal further details of Křetínský’s dealings in Russia, as well as a series of regulatory wrangles and a takeover saga that could set a troubling precedent for Royal Mail.
A meeting in Moscow
After landing at Moscow’s Vnukovo airport on the evening of 29 June 2016, Křetínský and a small group of colleagues were whisked by chauffeur-driven Mercedes for talks with Alexey Miller, a close ally of Vladimir Putin and the head of Russia’s gargantuan state-owned gas company, Gazprom.
Leaked documents, obtained by the Organized Crime and Corruption Reporting Project and reviewed by the Guardian, suggested that the summit was approved at the highest level of Russian politics.
Details of Křetínský’s travel arrangements were revealed by a leak of emails from the office of Alexander Babakov, a senior member of Russia’s parliament, the Duma, and a major investor in Crimea.
Russia had invaded and annexed the territory two years earlier, in an act of aggression that, despite international condemnation, proved to be only the beginning of Putin’s territorial ambitions in Ukraine.
Babakov was one of those placed under UK and EU sanctions, after Russia’s seizure of the territory.
There is no suggestion that Babakov attended the meeting, or derived any benefit from Křetínský’s presence in Moscow.
Photograph: Reuters
But the meeting had a clear geopolitical dimension: Russia was proposing to build a new pipeline, Nordstream II, that would transmit gas directly to Germany via the Baltic Sea, bypassing Ukraine.
That would spell bad news for SPP Infrastructure, the company that owns the rival Eustream pipeline, pumping Russian gas into Europe via Slovakia.
SPP Infrastructure has been jointly owned by the Slovakian state, which has a 51% stake, and Křetínský’s EPH, which has 49%, since 2013.
The company has a long-term deal with Gazprom, inherited from the pipeline’s previous owners, under which it receives a fee from the Russian company for pumping Putin’s gas into Europe. The contract, which is entirely legitimate under EU laws, lasts until 2028. It would be illegal for Eustream to take unilateral decisions to prevent Russian gas flowing through its pipes.
Annual reports for Eustream show the deal has been highly lucrative, with SPP paying €1.56bn (£1.29bn) in dividends to its shareholders since 2016. EPH, based on its 49% stake, was entitled to about €750m.
But back in 2016, that flow of gas – and money – was under threat.
Such was the risk that Slovakia’s prime minister, Robert Fico, flew in for talks with Putin two months later, reportedly bringing Křetínský with him for the Sphinx’s second jaunt to Moscow inside two months.
A spokesperson for Křetínský confirmed he took part in “intense discussions” because of concerns – which he said were shared by the US government – about the energy security of Slovakia and Ukraine if the new pipeline was built.
The spokesperson added that Eustream’s agreement with Gazprom was legally binding and pre-dated EPH’s ownership of a stake in the pipeline.
“Before 2022, Russian gas was a longstanding and accepted part of the European and UK energy mix, where all European countries were largely dependent on the import of gas from Russia,” the spokesperson said.
“This of course changed after the invasion of Ukraine in 2022 and since then, Eustream has done everything in its power to help European countries reduce their dependence on Russian gas.”
Nonetheless, Křetínský’s dealings with Russia are understood to have given the UK government pause for thought over the proposed takeover of IDS. In August, the Cabinet Office took the relatively rare decision to “call in” a transaction between two private businesses to examine whether it could be detrimental to national security.
A 45-day period for the review elapsed in September, indicating that the government has extended its inquiries.
The business secretary, Jonathan Reynolds, is not involved in the review but has sought to allay concerns raised in a select committee hearing by Liberal Democrat MP Joshua Reynolds (no relation) last month. Křetínský was a legitimate businessman and his Russian links were not a concern, the minister said. He pointed out that, in 2022, the previous government was happy for Křetínský to build his stake in IDS, after a similar pause.
The Cabinet Office does not comment on such reviews and it is not clear whether officials have run the rule over other aspects of Křetínský’s business dealings, not to mention those of his business partner Patrik Tkáč.
Tkáč has an even lower profile than Křetínský but they have been close business partners for decades.
They are already co-investors in West Ham United football club. The majority of the holding companies within Křetínský’s EP Group empire are 44% owned by Tkáč and investors “related” to his investment group, J&T. If the Royal Mail deal goes through, Tkáč is expected to hold the same stake in the company.
In June, the Guardian revealed that Tkáč’s J&T Banka is embroiled in a court case over a $6m (£4.7m) loan it provided to the former premier of the Turks and Caicos Islands Michael Misick, who is facing a corruption prosecution.
J&T denied any wrongdoing to the Guardian at the time.
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There have been questions about regulatory compliance within Křetínský’s and Tkáč’s collective endeavours, too.
One hiccup in 2012 saw EPH – an owner of coal and gas plants in which Křetínský is the majority shareholder but Tkáč also holds a stake – fined €2.5m by EU regulators for allegedly obstructing a raid by competition officials by tampering with emails.
“This decision sends a clear message to all companies that the [European] Commission will not tolerate actions which could undermine the integrity and effectiveness of our investigations by tampering with such information during an inspection,” the then EU competition commissioner, Joaquin Almunia, said in a statement at the time.
Nor was that EPH’s only brush with regulators.
It also owns a UK company, EP SHB Ltd, that was fined £23.63m last year after the regulator Ofgem concluded it had gamed the energy market.
Delivering on promises
Křetínský has indicated he wants to modernise the Royal Mail, raising concerns about job losses.
That seems all the more possible after IDS warned last month that Labour’s decision to raise employers’ national insurance contributions would cost the loss-making company £124m a year.
Some have speculated that Křetínský could merge IDS with the Dutch postal company PostNL, in which he holds only a 29% minority stake.
The spectre of cost cuts also looms large.
This year, Křetínský’s EP Global Commerce was part of a consortium that completed a deal for the troubled French supermarket Casino.
According to reports in France, the consortium had indicated in 2023 that it did not plan to cut staff and that there were no agreements to sell stores.
But as time went on, French media reported, Křetínský successfully pushed Casino to sell larger stores to competitors, despite union protests. In April 2024, Casino announced plans to cut up to 3,267 jobs, a decision described as a “social disaster” by one union representative.
A spokesperson for Křetínský did not answer questions about this.
Elsewhere in France, Křetínský faced opposition to another potential deal, again over fears of his intentions for the target company.
Křetínský, via his EP Equity Investment business, bid for a division of the French IT company Atos, a deal that would have seen him take a 7.5% stake in the whole company.
Bondholders reportedly opposed Křetínský’s offer, fearing that he would break up Atos. Politicians also raised national security concerns about a deal that would introduce foreign ownership to a company that plays a key role in the country’s nuclear weapons programme. Opposition was enough to scupper any chances of a deal.
As of today, the UK government has yet to intervene in the Royal Mail takeover and all the signs are that it will not.
Should the transaction go ahead, the Royal Mail will become the second big asset in the hands of a leading Czech investor after inquiries into their history in Russia, after the billionaire Karel Komárek won his bid for the national lottery licence.
Like Křetínský, Komárek has also counted Gazprom among his business partners and even took huge loans from state-owned Russian banks while the national lottery process was going on.
Komárek has publicly condemned the invasion of Ukraine, apparently to the satisfaction of Westminster.
In a statement, a spokesperson for Křetínský highlighted that he had done the same, describing the invasion as “against the very fundamentals of European civilisation”.
All the signs are that the Czech Sphinx has solved his latest riddle.
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