Members of the board accepted life insurance or stock options from the company, the police say, in violation of labor laws. ČEZ's supervisory board oversees the government's interest in the company and is separate from the company's board of directors.

The investigation was first reported Jan. 5 by the Czech newspapers Mladá fronta Dnes (MfD) and Hospodářské noviny.

Eva Miklíková, spokeswoman for the Czech Police, confirmed the investigation, but refused to give more information about the case. Prosecutor Martin Omelka also confirmed the investigation, adding that criminal prosecution has begun.

Martin Pecina, head of the Anti-Monopoly Office, is one of the accused former board members. He accepted the life insurance but turned down stock options, he said.

"Nothing makes sense in the case," he told The Prague Post Jan. 8. "My accusation is a mistake. I have nothing to do with all this. They should investigate the people who approved this bonus program."

The program began in 2001, while Pecina joined the supervisory board in 2003. Investigators have not disclosed the names of those under investigation, but several former ministers confirmed that they stood accused, including Pecina; Tomáš Pospíšil, former deputy finance minister; and Zdeněk Vorlíček, former deputy industry and trade minister. Oldřich Vojíř, a deputy for the Civic Democrats in Parliament who is protected by immunity, also acknowledged involvement in the case.

Radek Pokorný, a lawyer representing ČEZ, told MfD Jan. 7 that the company's incentives program is legal. The company has three reports confirming the program's legality, the paper reports.

In what may be a case of exceptionally bad timing, five of ČEZ's top managers sold 346,000 shares of their stock in the company Jan. 3 and 5, bringing in a total of 182 million Kč ($8.8 million) after taxes.

Alan Svoboda, former member of the board of directors, received nearly 56 million Kč for his 100,777 shares. Martin Roman, CEO of ČEZ, sold 47,823 shares for some 27 million Kč.

ČEZ's option program allows managers to purchase the company's shares at the market rate prior to assuming roles in the company, and to sell stock if the share price increases.