Prime Minister Vaclav Klaus said the incident would not threaten the future of the massive sell-off scheme, but analysts feared it might tarnish the country's financial reputation.
Police arrested Jaroslav Lizner after he accepted a payment of 8.33 million crowns ($300,000) in order to ensure the awarding of stock under the country's vouchers-for-shares scheme, ministry spokesman Jan Subert said in a statement Wednesday.
Lizner heads the Center for Coupon Privatization (CKP), which administers the program that grants shares in privatized companies to citizens in exchange for government vouchers given for a nominal fee.
Finance Minister Ivan Kocarnik said his deputy, Vladimir Rudlovcak, would take over the directorate of the CKP until the case is resolved.
Kocarnik said that Rudlovcak would take over the post immediately and that the current wave of privatizations would proceed as planned.
Lizner is also the director of the Central Securities Registry, the central clearing house which registers all bond and share transactions in the Republic.
Subert said police, acting on a tip from an informant, observed Lizner as he met three people outside a Prague restaurant late Monday. All four were apprehended after Lizner accepted the money packed in a briefcase.
Lizner was charged with corruption and "serious criminal economic activity" under the Czech penal code.
The three other people involved, who were not named, were not charged.
The coupon program has proved highly successful , but allegations of corruption and favoritism have abounded.
Klaus has repeatedly dismissed any pitfalls in the sell-off system he helped design, saying that speed was more important than accuracy.
The scheme is currently concluding its second large wave by privatizing 861 companies after exchanging shares in nearly 1,000 companies in the first wave which ended in 1992.
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