Czech Wealthy Magnate Takes Prime Ministerial Post, Vowing to Cut Commercial Interests
Tycoon Andrej Babis has officially become the Czech Republic's new premier, with his complete ministerial team slated to be appointed within days.
His selection followed a central stipulation from President Petr Pavel – a public commitment by Babis to cede command over his sprawling agribusiness and chemical group, Agrofert.
"I vow to be a prime minister who upholds the interests of every citizen, at home and abroad," declared Babis following the swearing-in at Prague Castle.
"A leader who will work to make the Czech Republic the best place to live on the entire planet."
High Aspirations and a Pervasive Business Presence
These are high-reaching aspirations, but Babis, 71, is familiar with ambitious plans.
Agrofert is so deeply embedded in the Czech economic fabric that there is even a dedicated app to help shoppers steer clear of 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 – is part of an Agrofert company, a warning symbol is displayed.
Babis, who was formerly prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will incorporate members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party.
The Pledge of Separation
If he fulfills his promise to withdraw from the company he established, he will no longer benefit from the sale of a single Agrofert product – from frankfurters to fertiliser.
As prime minister, he claims he will have no information of the conglomerate's economic status, nor any power to affect its performance.
Governmental decisions on public tenders or subsidies – whether Czech or European – will be made without regard to a company he will have severed ties with or gain financially from, he further notes.
Instead, he says that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an third-party manager, where it will remain until his death. Then, it will be inherited by his children.
This arrangement, he remarked in a Facebook video, went "far beyond" the requirements of Czech law.
Outstanding Issues
The legal nature of this trust remains unclear – a trust under Czech law, or one based abroad? The concept of a "blind trust" does not exist in Czech legislation, and an team of legal experts will be required to design an solution that is functional.
Doubts from Anti-Corruption Groups
Critics, including Transparency International, continue to doubt.
"A blind trust is not the answer," stated David Kotora, the head of Transparency International's Czech branch, in an interview.
"True separation is absent. He undoubtedly is acquainted with the managers. He knows Agrofert's portfolio. From an high office, even at a EU level, he could potentially influence in matters that would affect the sector in which Agrofert is active," Kotora cautioned.
Wide-Ranging Interests Beyond Agrofert
But it's not just food – and it's not only Agrofert.
In the outskirts 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 runs a chain of fertility centers, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.
The reach of Babis into all corners of Czech life is extensive. And as prime minister, for the second occasion, it is about to get broader.
