The Mystery of Muska

When an obscure Czech refugee named Frank Muska died 7 1/2 years ago, nobody seemed to know anything about him. It soon developed that he had left safety deposit boxes in London, Boston and Manhattan containing 2,000 shares in a Swiss company called Leader, A.G. Nobody knew much about that either.

Not until last week did the astounding truth about the obscure Swiss company come out. Actually, Leader, A.G. owned the whole foreign empire of Czechoslovakia's shoe king, Thomas Bata, which was left when he died in an airplane crash in 1932. Leader's entire stock consisted of the 2,000 shares, issued merely to "bearer." Since the bearer had been Muska, he technically controlled Leader.

Who was Muska, and how did he get the stock? The mystery started to clear up when Thomas Bata Jr. (rhymes with got ya), 34-year-old son of the shoe king, and Jan Bata, a half-brother of Thomas Sr., launched a court fight in New York for control of the empire. Each claimed the 2,000 shares, and demanded, as a starter, an 826-share block which Muska had deposited in a Manhattan bank.

Last week in Manhattan, after deliberating over the case for nine months, Justice Benjamin Schreiber of New York County's supreme court awarded the stock--and thus 40% control of the Bata empire--to Thomas Jr. and his mother. In doing so, he also unfolded a fantastic tale of international high finance and skulduggery.

Swiss Dummy. Switzerland's Leader, A.G. had been formed by Bata Sr. in 1931, said Justice Schreiber, for the "admitted purpose of concealing his own ownership of Bata companies and assets outside Czechoslovakia" to evade income taxes. To conceal his own ownership, he had turned the shares over to Muska, lifelong friend and trusted aide.

In the same year, Thomas Sr. had scribbled a strange memorandum and put it in his safe. In it, he had authorized half-brother Jan to buy the whole empire--then worth some $45 million--for only $2,500,000. Justice Schreiber wrote that the only logical surmise was that he did it to "defraud the tax authorities of Czechoslovakia," by making his estate "seem infinitely smaller than it was."

Flight Abroad. Jan thus took the empire over for a fraction of its worth and continued to run it, with the help of Thomas Jr., until 1939. Then, just before the Nazis took over Czechoslovakia, both fled the country. Thomas went to Canada, where he started a huge new Bata factory at "Batawa" near Frankford, Ont.; Jan came to the U.S., where he started a factory at Belcamp, Md. Muska had also fled, taking the Leader shares with him, but telling neither Jan nor Thomas about them. Not until 1942 did Muska privately reveal the existence of the shares. By that time, Jan had been blacklisted by the U.S. and Britain for playing footie with the Nazis and had fled to Brazil, where he started a big new factory at "Batatuba." Young Thomas pitched in with the Allies, and succeeded in retaining operating control of most of the empire that was outside Nazi hands.

When the discovery of Leader's existence raised the question of who owned the empire, Jan Bata dug out the old 1931 memorandum. Instead of being a tax dodge, it was, he insisted, evidence of a legitimate oral contract by which he had bought everything Bata owned. But Justice Schreiber ruled that all of Jan Bata's claims were "utterly false."

Jubilant Thomas Bata Jr. this week was confident that he would soon get the remaining 60% of the shares (still held in trust by a Boston lawyer and a London bank) and complete control of the shoe empire's 34 plants and 5,000 retail stores in 27 countries outside of the Iron Curtain--where the Communists have nationalized Bata's factories. Tom Jr. ordered his lawyers to press new suits against Uncle Jan to seize control of the Brazilian and U.S. plants, which Jan still runs.

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