The company suspended payments of obligations in June 2013, but has reportedly been in financial difficulty since 2010, when police launched a criminal investigation into allegations of tax evasion. It is claimed that Legios made a false purchase of wagon components worth CKr 588m in order to claim a VAT rebate of CKr 111m from the state. However, Legios says the Czech government owes the company more than CKr 800m and this has pushed it to insolvency. The case is being heard by the Court of Justice in České Budĕjovice.
By filing for insolvency, Legios is protected against any claims from creditors for a period of three months, during which time the company will seek to avoid bankruptcy, which would jeopardise around 1300 jobs at its four plants in Louny, Horni Slavkov, Nymburk, and Česke Velenice.
Legios insists that the situation will not affect wagon production or the company's export business.
