Czech Coal Baron Says Protests Are PR Stunt by Rival

(Bloomberg) -- A businessman who became one of the richest in the Czech Republic a decade ago now says he’s besieged by phony protesters dressed as coal miners demonstrating outside his estate in Hilton Head Island, South Carolina.

Czech Coal Baron Says Protests Are PR Stunt by Rival

Zdenek Bakala claims the people who marched through the streets of the coastal resort town in August chanting “Bakala is a creep! He’ll steal your home while you sleep!” were actually paid by a rival to harass him.

Bakala holds himself out as a fighter of corruption. The 57-year-old became a billionaire after buying communist-era mines and floating them on the Prague and London stock exchanges in 2008. The alleged smear campaign is detailed in a lawsuit filed in federal court in Beaufort, South Carolina, and features “astroturfing,” the practice of faking grass-roots support that has gained notoriety in business and politics in recent years.

Bakala says his chief nemesis is Pavol Krupa, a Slovak-born businessman. Krupa was a creditor to OKD, the main unit of New World Resources, the coal mining company that made Bakala wealthy, and his firm had unsuccessfully sought to buy it before it went insolvent, according to local press reports. Krupa, who lost a bid in 2016 to block OKD’s parent from controlling assets, claims that Bakala has victimized miners and investors.

‘Cultivating Perception’

Bakala claims Krupa -- who he says is backed by populist politicians in the region -- is harassing him, and has targeted Bakala because of his anti-corruption activities. According to the complaint, Krupa has initiated frivolous lawsuits, promoted death threats on Facebook and instigated criminal investigations targeting Bakala. Krupa also threatened to send soccer hooligans to protest in front of Bakala’s home in Switzerland and ultimately demanded a payment of 500 million Czech koruna ($23 million) in 2017 to stop, court documents say.

When Bakala rejected that offer, Krupa hired Beverly Hills, California-based Crowds on Demand “to bring his campaign of defamation, extortion, and harassment to the U.S.,” according to the complaint.

Krupa didn’t comment specifically on the lawsuit, which is being reviewed by his lawyers, Krupa Global Investments spokeswoman Barbora Hanakova said in an email. In the statement, Krupa said Bakala should return “at least 50 billion koruna, and not just 500 million koruna,” to the Czech state.

Crowds on Demand describes itself on its website as “your home for protests, rallies, advocacy, audiences, PR stunts and political events.” The founder of the firm, Adam Swart, has said his business “is about cultivating perception.” Swart declined to comment on Bakala’s lawsuit, which names him and his company as defendants.

Crowds on Demand

By Bakala’s account, Crowds on Demand used paid actors on Hilton Head Island to stage a series of protests, some of which are memorialized on YouTube. It also created a website loaded with misinformation and harangued people connected to Bakala’s various business and philanthropic ventures with “countless emails,” according to the court documents.

Czech Coal Baron Says Protests Are PR Stunt by Rival

Bakala claims the firm violated U.S. laws against racketeering and failed to register as a foreign agent, and accused Swart of badmouthing him at the business school at Dartmouth College and the Aspen Institute, where Bakala serves on advisory boards. Bakala also said Crowds on Demand tried to disrupt one of his real-estate transactions.

Bakala has been a frequent target of Czech President Milos Zeman, who says the financier cheated the state, investors and workers in OKD. Bakala owns a publishing company in Prague that prints the country’s biggest business daily, Hospodarske Noviny, and a political weekly Respekt, which are critical of Zeman’s anti-Muslim views and his support for Russian leader Vladimir Putin.

Bakala is represented by a prominent U.S. law firm, Quinn Emanuel Urquhart & Sullivan LLP, and one of the firm’s Chicago lawyers on the case, Andrew Schapiro, was the top American diplomat in the Czech Republic during the latter part of Barack Obama’s presidency.

“I came to know Mr. Bakala as a champion of democracy, honest government, and free markets when I was Ambassador to the Czech Republic,” he said in an email. “When he asked me to assist in this case, I was happy to do it.”

The case is Bakala v. Krupa, 18-cv-02590, U.S. District Court, District of South Carolina (Beaufort).

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