A Czech Billionaire Secures PM Post, Vowing to Sever Corporate Interests
Entrepreneur Andrej Babis has taken office as the Czech Republic's new prime minister, with his complete ministerial team slated to assume their roles in the coming days.
His selection was contingent upon a central demand from President Petr Pavel – a formal commitment by Babis to relinquish command over his extensive agribusiness and chemical conglomerate, Agrofert.
"I vow to be a prime minister who upholds the interests of every citizen, both locally and globally," stated Babis after the event at Prague Castle.
"A prime minister who will work to transform the Czech Republic the best place to live on the whole globe."
High Aspirations and a Pervasive Business Presence
These are lofty ambitions, but Babis, 71, is familiar with large-scale thinking.
Agrofert is so thoroughly integrated in the Czech commercial ecosystem that there is even a specialized application to help shoppers avoid purchasing products made by the group's numerous subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or packaged bread from Penam – belongs to an Agrofert company, a thumbs-down symbol shows up.
Babis, who was formerly prime minister for four years until 2021, has moved rightward in recent years and his cabinet will include members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.
The Promise of Withdrawal
If he upholds his promise to divest from the company he founded and grew, 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 insight of the conglomerate's fiscal condition, nor any ability to influence its prospects.
State decisions on public tenders or subsidies – whether national or EU-funded – will be made with no consideration for a company he will have severed ties with 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 autonomous trustee, where it will stay until his death. At that point, it will transfer to his children.
This arrangement, he commented in a social media post, went "far beyond" the stipulations of Czech law.
Clarification Needed
The specific type of trust has yet to be clarified – a domestic trust, or one based abroad? The legal framework of a "blind trust" has no basis in Czech statutory law, and an army of lawyers will be required to design an solution that works.
Criticism from Anti-Corruption Groups
Skeptics, including Transparency International, continue to doubt.
"Such a trust is not the answer," argued David Kotora, the head of Transparency International's Czech branch, in an comment.
"There's no separation. He obviously knows the managers. He knows Agrofert's holdings. From an executive position, even at a European level, he could possibly act in matters that would affect the sector in which Agrofert functions," Kotora warned.
Extensive Influence Beyond Agrofert
But it's not only food – and it's not just 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, controlled by Babis.
Hartenberg also operates a network of fertility centers, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The footprint of Babis into multiple areas of Czech life is extensive. And as prime minister, for the second occasion, it is set to grow broader.
