Czech Billionaire Takes Prime Ministerial Post, Promising to Sever Business Interests
Entrepreneur Andrej Babis has taken office as the Czech Republic's new premier, with his government expected to assume their roles within days.
His appointment came after a fundamental condition from President Petr Pavel – a public commitment by Babis to relinquish oversight over his extensive food-processing, agriculture and chemicals conglomerate, Agrofert.
"I promise to be a prime minister who champions the interests of every citizen, domestically and internationally," declared Babis after the swearing-in at Prague Castle.
"A leader who will work to make the Czech Republic the top destination to live on the face of the Earth."
Grand Visions and a Pervasive Business Presence
These are grandiose goals, but Babis, 71, is used to ambitious plans.
Agrofert is so thoroughly integrated in the Czech business landscape that there is even a specialized application to help shoppers bypass 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 – falls under an Agrofert company, a thumbs-down 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 Eurosceptic "Drivers for Themselves" party.
The Commitment of Separation
If he honors his promise to divest from the company he founded and grew, he will stop gaining from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he states he will have no insight of the conglomerate's financial health, nor any power to affect its performance.
State decisions on state contracts or subsidies – whether Czech or European – will be made independently of a company he will no longer own or gain financially from, he adds.
Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an third-party manager, where it will stay until his death. Upon that event, it will transfer to his children.
This arrangement, he stated in a Facebook video, went "far beyond" the requirements of Czech law.
Outstanding Issues
The specific type of trust is still uncertain – a trust under Czech law, or one based abroad? The legal framework of a "blind trust" is not recognized in Czech legislation, and an army of lawyers will be necessary to craft an structure that is functional.
Doubts from Anti-Corruption Groups
Watchdog organizations, including Transparency International, are still skeptical.
"Such a trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an statement.
"The divide is insufficient. [Babis] obviously knows the managers. He knows Agrofert's holdings. From an high office, even at a EU level, he could potentially influence in matters that would impact the industry in which Agrofert functions," Kotora advised.
Extensive Influence Extending Past Agrofert
But it's not only food – and it's not just Agrofert.
In the outskirts of Prague, a private health clinic 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 runs a chain of fertility centers, as well as a flower shop network, 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 set to grow even wider.
