Czech Tycoon Assumes PM Role, Promising to Disentangle Business Interests
Wealthy businessman Andrej Babis has officially become the Czech Republic's new premier, with his complete ministerial team slated to take their posts within days.
His appointment came after a key condition from President Petr Pavel – a formal vow by Babis to relinquish command over his vast food-processing, agriculture and chemicals holding company, Agrofert.
"I promise to be a prime minister who defends the interests of every citizen, both locally and globally," affirmed Babis following the event at Prague Castle.
"A prime minister who will work to transform the Czech Republic the top destination to live on the whole globe."
High Aspirations and a Vast Business Presence
These are lofty ambitions, but Babis, 71, is accustomed to large-scale thinking.
Agrofert is so thoroughly integrated in the Czech economic fabric that there is even a dedicated app to help shoppers avoid purchasing products made by the group's over two hundred subsidiaries.
If a product – for example, frankfurters from Kostelecké uzeniny or packaged bread from Penam – belongs to an Agrofert company, a negative symbol shows up.
Babis, who previously served as prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will incorporate members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party.
The Commitment of Separation
If he upholds his pledge to withdraw from the company he built from scratch, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser.
As prime minister, he claims he will have no knowledge of the conglomerate's economic status, nor any ability to affect its fortunes.
Administrative decisions on state contracts or subsidies – whether national or EU-funded – will be made independently of a company he will no longer own or profit from, he further notes.
Instead, he explains that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an autonomous trustee, where it will stay until his death. Upon that event, it will pass to his children.
This arrangement, he remarked in a Facebook video, went "well above" the requirements of Czech law.
Clarification Needed
What kind of trust remains unclear – a domestic trust, or one in a foreign jurisdiction? The legal framework of a "fully independent trust" is not recognized in Czech legislation, and an army of lawyers will be needed to craft an solution that works.
Skepticism from Observers
Skeptics, including Transparency International, continue to doubt.
"Such a trust is an inadequate measure," said David Kotora, the head of Transparency International's Czech branch, in an statement.
"True separation is absent. He obviously knows the managers. He knows Agrofert's portfolio. From an high office, even at a European level, he could possibly act in matters that would affect the sector in which Agrofert is active," Kotora cautioned.
Extensive Influence Extending Past Agrofert
But it's not just food – and it's not only Agrofert.
In the eastern suburbs of Prague, a private health clinic towers over the O2 arena. While it is owned by a company called FutureLife a.s, that company is controlled by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.
Hartenberg also manages a network of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.
The footprint of Babis into every facet of Czech life is extensive. And as prime minister, for the second occasion, it is poised to become even wider.
