(FORTUNE Magazine) – Thomas Bata Jr. got a hero's welcome when he returned to his native Czechoslovakia two years ago, ending 50 years of exile in Canada. Everyone expected that Bata, 76, who built an international shoe manufacturing and retailing giant with an estimated $3 billion a year in sales, would simply reclaim and revitalize his family's local shoe business, confiscated in 1945. Instead, Bata is battling the Czech government for the decrepit operations. The government says its investigations show that his father had wanted to pass controlling shares to his flighty brother Jan, Thomas's uncle, who was later convicted of collaborating with the Nazis. Under Czech law, any property taken from collaborators will not be returned to relatives.

Bata is now negotiating with the Czechs to set up a new venture based on the old company. Czechoslovak television reports that he may have to make a cash bid to regain control. Competition is steep -- 14 other foreign companies reportedly want a leg up on the business.