Facts about PPF Group
Unfounded allegations against and misleading information about PPF Group appear in the Czech media from time to time. The following points put the record straight as regards the most frequent of them.
PPF and the Czech Republic
PPF is an international investment group firmly rooted in the Czech Republic
PPF Group was first established in what was then Czechoslovakia in 1991. By the end of 2018, it employed 14,000 people in the Czech Republic. In all countries in which it has a presence, PPF Group retains its profile as an entity with Czech roots and actively promotes cultural and social relationships with each of the countries in which it operates.
The main Group’s consultancy, PPF a.s., is based in Prague, along with other PPF Group companies, including the biotechnology company Sotio. In the Czech Republic, Sotio is a leader in the research and development of unique drugs for cancer treatment, and its results to date are unparalleled in Central and Eastern Europe.
In Brno, Ostrava, and Prague, the technology company EmbedIT, part of PPF Group, employs hundreds of top IT experts who provide technical services for Home Credit Group all over the world.
In recent years, PPF Group has channelled billions of Czech crowns into support for education, culture and sport. This support has made it possible for thousands of Czech pupils and students to have an excellent education. In culture and art, PPF is one of the leading Czech patrons.
Taxes and Levies
PPF Group pays taxes where it runs its business
PPF Group operates in 24 countries and, in line with legislation, pays income tax in the country in which it conducts business and generates profit. The same is true for taxes and other labour-related contributions paid for PPF’s 135,000 employees around the world.
PPF is one of the biggest tax payers in the Czech Republic
In 2019, PPF Group’s Czech businesses paid a total of CZK 3.0 billion in income taxes to the Czech public purse. According to the Czech Ministry of Finance, O2 Czech Republic is among the Top 20 corporate income tax payers for 2018. Big tax payers also include CETIN, Škoda Transportation and PPF banka. In aggregate, PPF Group is actually the seventh largest tax payer in the Czech Republic.
PPF Group is also a major employer in the Czech Republic. At the end of 2019, Czech companies in which PPF Group held majority interests employed approximately 14,000 people, for whom they paid CZK 3.9 billion to the State in social security and health insurance. Therefore, those companies in which PPF Group had a majority interest sent CZK 6.9 billion to the State in income tax and labour-related payments.
Petr Kellner, the founder and the majority shareholder of PPF Group, is tax resident in the Czech Republic.
The primary reason for PPF’s registration in the Netherlands is the stability of the legal environment and the treaties on the protection of investments
The reason for the registration of PPF Group’s holding companies in the Netherlands is the stable local legislative environment, in which political changes and election results do not have any major impact. Another reason for PPF’s registration in the Netherlands, is the country’s rigorous treaties on the protection of investments with the largest possible number of countries around the world, which is crucial for PPF in light of its global investment activities. Unfortunately, the Czech Republic does not yet offer such a continuity of legal framework, nor the same protection of investments on a global scale. Like PPF, some other Czech companies with global operations are registered in the Netherlands, including AVAST, Linet, spirit-producer Rudolf Jelínek, and many others.
In regards to taxes: in the Netherlands, the tax on dividends is the same as the tax rate used in the Czech Republic (15%).
We have an extensive portfolio and global presence; China, India, the US, and Russia are the largest markets in which PPF Group runs business
PPF Group conducts businesses in 24 countries, spanning three continents and various industries, such as financial services, telecommunications, biotechnology, real estate and mechanical engineering. Despite our very significant presence in Asia, we continue to be a European company. PPF Group owns assets exceeding EUR 47 billion (as at 30 June 2019)
We are not dependent on political support
PPF Group focuses on business abroad, and not on the State’s foreign policy
The Czech Republic’s foreign and security policies are formulated by the democratic state’s bodies elected for these purposes: the Cabinet, Parliament, and the President. As it is a Group that operates globally, PPF looks for suitable business opportunities throughout the world, but remains strictly apolitical. It takes care to follow the laws and rules in the countries where it conducts business. Along with numerous other Czech and international companies, in those countries where the Czech Republic applies ‘economic diplomacy’, PPF makes use of the offer of support by official Czech institutions.
PPF does not depend on political support
PPF Group has built and continues to build its international business based on the attractiveness of the opportunities, usually on a green field basis and with no help from third parties. The Group typically enters markets with great potential in terms of retail customers, or markets that are developing their infrastructures.
In Russia, we have conducted business since 1991. In Beijing, China, we opened our representation office back in 2004. Three years later, Home Credit opened its subsidiary in Shenzhen, in southern China, and initially provided consumer credit in five Chinese provinces. In 2010, China adopted a consumer finance law whereby Home Credit and another three Chinese companies were granted the first ever licences for consumer credit provision in the country. Following the evaluation of its successful implementation for three years, in November 2013, almost a year before President Miloš Zeman’s first trip to China, the law, and licences, were extended to cover the whole of China. Our success in the Chinese market is a product of many years of effort, and not a result of the support of any Czech political representatives.
Security of the telecommunications networks
Security of the telecommunications networks operated by PPF Group companies is the absolute priority
The PPF Group companies’ telecommunications networks primarily consist of elements from various suppliers: specifically CISCO, NOKIA, Siemens, and Huawei, and a number of others. Network security is a fundamental priority at all times and the most stringent security standards are applied everywhere. CETIN, a telecom infrastructure company, which operates the most extensive fixed network in the Czech Republic, has only around 20% of its network composed of Huawei elements. In the Czech Republic, the mobile network is predominantly composed of NOKIA equipment. The forthcoming road toll system does not contain any Huawei technology.
In direct response to NÚKIB’s (the National Cyber and Information Security Agency) warning and request that Czech companies ‘adopt security measures’, our companies immediately launched the required security audits in line with NÚKIB’s detailed methodology. PPF has repeatedly stated that if the State, i.e. the competent regulator, decides to adopt any additional stricter measures, it will, naturally, comply with such a decision.
The Memorandum with Huawei does not constitute an agreement on the purchase of goods and services
PPF and Huawei signed a memorandum of cooperation in the rollout of 5G networks in the autumn of 2018. The Memorandum only states that the two parties will explore areas in which they may potentially agree on commercial cooperation. No commercial agreements between PPF Group companies and Huawei concerning 5G networks have yet been concluded in relation to this Memorandum.
Support for education, culture and scientific research
Priorities of PPF’s philanthropic activities include education, culture, and scientific research
In the countries in which PPF Group conducts business and invests it also supports non-profit and charitable projects in education, culture, sport, and scientific research.
Over the 28 years of its existence, PPF Group has contributed CZK 2.56 billion in the Czech Republic, primarily for education, art and sport. In 2018, it provided CZK 358 million for these activities.
PPF Group’s philanthropic activities are largely carried out through The Kellner Family Foundation, the family foundation of Mrs Renáta Kellnerová and Mr Petr Kellner, which primarily focuses on activities in education and which is one of the largest foundations of this kind in the Czech Republic. Every year, it allocates around CZK 90 million. A total of 342 students at the Open Gate Grammar School have received needs-based scholarships since the school was founded. 27 students are from children’s homes and 23 live in foster care. The other students sponsored by the Foundation come from low-income families.
In the 2019/2020 academic year, the Foundation accepted 61 grantees to its Universities project; the students have received financial grants for paying their school fees and living expenses, primarily at universities abroad. Over the ten years of this project, 177 students have been able to attend universities both abroad and in the Czech Republic with support from The Kellner Family Foundation.
Helping Schools Succeed, a project for public primary schools which is, for the tenth year, intended to help to apply the principles of ‘the learning school’ in public education, now receives support amounting to CZK 37 million every year, and 860 teachers at 23 schools, and through them almost 9,500 pupils have benefited from this scheme.
A number of cultural projects have been running thanks to financial contribution from PPF. For the 20th year now, the Group has been the General Partner of the Summer Shakespeare Festival, and it has been partnering the Jára Cimrman Theatre for the same period of time. We sponsor a festival of art in Prague art galleries (the Prague Art Week) and operate major exhibition facilities in Prague: the Josef Sudek Studio and the Václav Špála Gallery.
PPF Art manages what is probably the largest private collection of Czech and Slovak photography, as well as an extensive collection of paintings. PPF Group has lent, free of charge, six valuable string instruments with a total value of around CZK 20 million to the Czech Philharmonic.