The Prague City Hall will have an audit of the contractual relations that led to a debt of about CZK 30 million for the lease of a house on Old Town Square by Lorinfaj Promotion. This was approved by the city councillors yesterday evening. The company rented the building from the city at the time of the coronavirus pandemic at a high rent, which it was then unable to pay due to a major drop in tourism. Jan Rak, director of the council’s property department, told the meeting that an agreement was in place for a payment plan until 2035.
The lease of the building on Old Town Square was concluded with the company by the city-owned company Trade Centre Praha (TCP) at the end of 2020 with a rent of about CZK 22 million per year, which is an extremely high amount even by the standards of the centre of the metropolis. In the first few months of the contract, the company paid only CZK 10,000 per month due to necessary investments, but the full amount was never paid and the rent debt gradually climbed to the lower tens of millions of crowns.
Opposition deputy Kristýna Drápalová (Praha Sobě) successfully proposed that the city should have an audit of the contractual relations regarding the lease. According to her, Prague is in an extremely disadvantageous situation and it is right to investigate how it got into it. “I strongly suspect that there has been managerial misconduct by TCP,” she said.
Adam Zábranský (Piráti), Prague’s councillor for property, said that the company is currently paying half of the agreed rent according to a verbal agreement with TCP, next year it will be 75 percent and the full amount will start to be paid in 2025. The owner of the company, Czech-Albanian businessman Lorenc Hysi, said he guarantees the debt with his own assets.
Rak added that the company has acknowledged the debt until the end of 2022 and is complying with the current agreement. “The situation is moving towards a solution, towards the payment of all debts incurred,” he said. He said the planned repayment schedule is designed to last until the end of the lease period, i.e. until 2035. However, the agreement will still have to be approved by councillors given the level of debt. The entrepreneur himself previously told Seznam Zpravy that he would pay the entire debt.
Source: CTK
