Mr Babis, who is a member of Guy Verhofstadt’s EU party group ALDE, is subject of a police investigation into his possible involvement in an alleged £1.7 million misuse of EU subsidies. Prague’s public prosecutor said the police had handed investigation files to prosecutors, according to a spokesman. “The investigation by the police has been concluded and there is a recommendation to indict all those charged by the police,” the spokesman said.
Mr Babis, the country’s second richest man, was amongst those who were charged by the police, the spokesman added.
Prosecutors must now decide whether to formally charge Mr Babis, who if found guilty could face between five and 10 years in prison.
Mr Babis, an outspoken media and chemical tycoon, denied any wrongdoing and said the case was part of a political plot against him.
“It has been politicised,” he told the state’s CTK news agency on Wednesday.
He told Czech radio: “This is a live case, and this is proof that it is a conspiracy, a political case. Because I do not understand how you can know about this earlier than I do.
“Can you please explain to me how it is possible that media know about this from a live case before people who are directly involved?”
The case involves a farm that received a number of EU subsidies after its ownership was transferred from Mr Babis’ Agrofert group of 250 companies to his family members.
The subsidies were meant for small and medium businesses and Agrofert would not have been eligible.
In the Czech legal system, police bring initial charges. They then investigate and present findings to a state attorney who then decides whether to go to court, ask the police to investigate further or halt proceedings.
The European Union’s OLAF anti-fraud squad has also been looking into the case, according to a spokesman.
Mr Babis’ coalition government has been left on the rocks by the announcements and allegations.
His junior coalition partner – the centre-left Social democrats – have previously threatened to pull out of the government in the past over the accusations.
A spokesman for the party said they would wait for a decision by the state attorney before taking action.
Opposition politicians look to use the news as a boost ahead of the European Parliament elections, which are just six weeks away.
Mr Babis’ ANO party currently has a double-digit lead in the opinion polls ahead of the vote.
Petr Fiala, head of the ODS party, the Czech Republic’s largest opposition group, said: “If Prime Minister Babis is really charged, he should resign in order to resolve his personal and business problems, as any other citizen would in such a situation.
“His case is damaging the reputation of the government as well as the reputation of the Czech Republic abroad.”
The investigation into Mr Babis has marred his past two years and complicated his efforts to form a government after ANO became the biggest parliamentary group after the Czech elections in 2017.
The country is not due to hold national elections until 2021 but will take part in the EU Parliament elections in May.
Mr Babis is a member of the liberal ALDE group, whose EU Parliament bloc are current chaired by Guy Verhofstadt.
It will leave Mr Verhofstadt in a sticky situation after the former Belgian prime minister demanded rivals in the European People’s Party deal with their own black sheep.
Last December, the EU Parliament voted through a resolution ordering the European Commission to stop subsidies to companies linked to Mr Babis and investigate all possible conflicts of interest.