A Czech Billionaire Secures PM Role, Vowing to Sever Commercial Empire
Wealthy businessman Andrej Babis has taken office as the nation's new prime minister, with his full cabinet anticipated to take their posts shortly.
His selection was contingent upon a fundamental stipulation from President Petr Pavel – a formal assurance by Babis to cede command over his vast agribusiness and chemical conglomerate, Agrofert.
"I vow to be a prime minister who upholds the interests of all our citizens, domestically and internationally," stated Babis after the swearing-in at Prague Castle.
"A leader who will work to make the Czech Republic the finest location to live on the entire planet."
Lofty Ambitions and a Far-Reaching Business Presence
These are lofty ambitions, but Babis, 71, is familiar with thinking big.
Agrofert is so deeply embedded in the Czech commercial ecosystem that there is even a specialized application to help shoppers steer clear of purchasing products made by the group's numerous subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – belongs to an Agrofert company, a negative symbol appears.
Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will feature members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party.
The Pledge of Separation
If he fulfills his vow to withdraw from the company he established, he will no longer benefit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he claims he will have no insight of the conglomerate's economic status, nor any capacity to affect its fortunes.
Governmental decisions on public tenders or subsidies – whether national or EU-funded – will be made without regard to a company he will have severed ties with or gain financially from, he further notes.
Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a trust managed by an autonomous trustee, where it will remain until his death. At that point, it will be inherited by his children.
This arrangement, he remarked in a social media post, went "far beyond" the stipulations of Czech law.
Unanswered Questions
The specific type of trust remains unclear – a domestic trust, or one based abroad? The concept of a "blind trust" is not recognized in Czech legislation, and an battalion of attorneys will be needed to craft an arrangement that is legally sound.
Doubts from Observers
Skeptics, including Transparency International, remain unconvinced.
"Such a trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an comment.
"True separation is absent. He obviously knows the managers. He knows Agrofert's range of businesses. From an executive position, even at a European level, he could potentially influence in matters that would impact the industry in which Agrofert is active," Kotora cautioned.
Extensive Influence Beyond Agrofert
But it's not only food – and it's not just Agrofert.
In the eastern suburbs of Prague, a medical facility towers over the O2 arena. While it is the property of a company called FutureLife a.s, that company is majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, majority-owned by Babis.
Hartenberg also operates a network of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The reach of Babis into multiple areas of Czech life is broad. And as prime minister, for the second time, it is about to get even wider.