Final Word from Tuesday, February 18, 2014

We don't subscribe to the speculation that the Nov. 7 devaluation was timed to benefit PPF, but CNB Gov. Miroslav Singer's weak disavowal of it last night on Hyde Park didn't do much to dispel the rumor. The first red flag came when he was asked who the main shareholders of PPF are. The viewer was likely alluding to rumors that the real owners are Russians, or perhaps even Václav Klaus. Singer said his only information about this comes from the press, where of course Petr Kellner is listed as the 99% owner. Singer is not only the top financial regulator in the country, but he also worked for PPF as a board member at Česká pojišťovna. This makes his comment about relying on the press seem quite odd. The second red flag came when he talked about the timing of the intervention and PPF's purchase of O2. Large investors use hedging anyway, he said, as if this eliminated the possibility that someone with inside information could profit from the devaluation. Even a trusting person would be forgiven for having doubts after last night's performance. [Czech Republic hedge Czech TV Television Telefónica]

Glossary of difficult words

Correction: Although Miroslav Singer served on the board of Česká pojišťovna in 1996 at the same time as Petr Kellner, he represented the National Property Fund and was never employed by PPF. Singer left the insurer that year, after PPF and IPB took over control of it.

disavowal - denial, rejection;

Hyde Park - see the 20:40 (8:40 pm) mark;

to dispel - to make a doubt, feeling or belief disappear;

red flag - a warning sign of danger or of a problem;

hedging - a financial instrument used for securing against a change in market conditions.

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