A Czech Billionaire Takes Prime Ministerial Role, Pledging to Sever Business Interests
Wealthy businessman Andrej Babis has officially become the nation's new premier, with his full cabinet slated to take their posts within days.
His appointment was contingent upon a key condition from President Petr Pavel – a formal assurance by Babis to relinquish oversight over his extensive food-processing, agriculture and chemicals group, Agrofert.
"I vow to be a prime minister who defends the interests of all our citizens, at home and abroad," declared Babis after the ceremony at Prague Castle.
"A leader who will work to transform the Czech Republic the top destination to live on the whole globe."
Lofty Ambitions and a Pervasive Business Presence
These are high-reaching aspirations, but Babis, 71, is accustomed to thinking big.
Agrofert is so deeply embedded in the Czech business landscape that there is even a mobile tool to help shoppers steer clear of purchasing products made by the group's more than 200 subsidiaries.
If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – belongs to an Agrofert company, a warning symbol is displayed.
Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.
The Pledge of Separation
If he honors his vow to separate himself from the company he established, he will cease to profit from the sale of a single Agrofert product – from frankfurters to fertiliser.
As prime minister, he asserts he will have no knowledge of the conglomerate's financial health, nor any capacity to affect its fortunes.
Administrative decisions on government procurement or subsidies – whether national or EU-funded – will be made independently of a company he will have severed ties with or profit from, he emphasizes.
Instead, he explains that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an independent administrator, where it will remain until his death. Then, it will be inherited by his children.
This arrangement, he stated in a online address, went "well above" the stipulations of Czech law.
Unanswered Questions
The specific type of trust is still uncertain – a trust under Czech law, or one based abroad? The notion of a "fully independent trust" has no basis in Czech legislation, and an army of lawyers will be required to craft an structure that works.
Doubts from Anti-Corruption Groups
Watchdog organizations, including Transparency International, are still skeptical.
"A blind trust is not the answer," argued David Kotora, the head of Transparency International's Czech branch, in an statement.
"There's no separation. [Babis] is familiar with the managers. He knows Agrofert's portfolio. From an high office, even at a EU level, he could possibly act in matters that would affect the sector in which Agrofert functions," Kotora warned.
Wide-Ranging Interests Beyond Agrofert
But it's not just food – and it's not only Agrofert.
In the outskirts of Prague, a medical facility 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, majority-owned 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 multiple areas of Czech life is broad. And as prime minister, for the second occasion, it is about to get even wider.