Czech Billionaire Takes Prime Ministerial Office, Promising to Sever Commercial Interests

Entrepreneur Andrej Babis has taken office as the nation's new premier, with his complete ministerial team slated to be appointed within days.

His confirmation followed a fundamental stipulation from President Petr Pavel – a public assurance by Babis to cede command over his extensive agribusiness and chemical holding company, Agrofert.

"I commit to be a prime minister who champions the interests of all our citizens, both locally and globally," declared Babis after the ceremony at Prague Castle.

"A leader who will work to transform the Czech Republic the finest location to live on the whole globe."

Grand Visions and a Vast Corporate Footprint

These are high-reaching aspirations, but Babis, 71, is used to ambitious plans.

Agrofert is so thoroughly integrated 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 over two hundred subsidiaries.

If a product – for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – is part of an Agrofert company, a thumbs-down symbol is displayed.

Babis, who previously served as prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will include members of the right-wing SPD party and the EU-skeptical "Motorists for Themselves" party.

The Pledge of Separation

If he honors his pledge to withdraw from the company he established, he will stop gaining from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he claims he will have no knowledge of the conglomerate's fiscal condition, nor any capacity to influence its fortunes.

Governmental decisions on state contracts or subsidies – whether Czech or European – will be made with no consideration for a company he will have severed ties with or gain financially from, he further notes.

Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be placed in a trust managed by an independent administrator, where it will stay until his death. Then, it will be inherited by his children.

This arrangement, he commented in a social media post, went "well above" the stipulations of Czech law.

Clarification Needed

What kind of trust is still uncertain – a trust under Czech law, or one based abroad? The concept of a "blind trust" is not recognized in Czech legislation, and an team of legal experts will be necessary to design an structure that works.

Skepticism from Watchdogs

Watchdog organizations, including Transparency International, are still skeptical.

"A blind trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an comment.

"The divide is insufficient. He is familiar with the managers. He knows Agrofert's portfolio. From an position of power, even at a European level, he could possibly act in matters that would affect the industry in which Agrofert functions," Kotora warned.

Extensive Influence Beyond Agrofert

But it's not just food – and it's not only Agrofert.

In the eastern suburbs of Prague, a private health clinic stands near 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 chain 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 wide. And as prime minister, for the second time, it is poised to become even wider.