Czech Wealthy Magnate Assumes PM Role, Pledging to Cut Commercial Interests
Entrepreneur Andrej Babis has been sworn in as the Czech Republic's new prime minister, with his complete ministerial team slated to take their posts shortly.
His selection was contingent upon a central demand from President Petr Pavel – a public vow by Babis to cede control over his sprawling agribusiness and chemical holding company, Agrofert.
"I commit to be a prime minister who champions the interests of the entire populace, at home and abroad," affirmed Babis after the event at Prague Castle.
"A leader who will work to establish the Czech Republic the top destination to live on the face of the Earth."
Lofty Ambitions and a Far-Reaching Business Presence
These are high-reaching aspirations, but Babis, 71, is familiar with thinking big.
Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a mobile tool to help shoppers bypass purchasing products made by the group's more than 200 subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or packaged bread from Penam – falls under an Agrofert company, a negative 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 feature members of the far-right SPD and the EU-skeptical "Motorists for Themselves" party.
The Pledge of Divestment
If he fulfills his vow to divest from the company he built from scratch, he will no longer benefit from the sale of a single Agrofert product – from frankfurters to fertiliser.
As prime minister, he states he will have no knowledge of the conglomerate's financial health, nor any capacity to affect its fortunes.
State decisions on government procurement or subsidies – whether Czech or European – will be made without regard to a company he will no longer own or profit from, he further notes.
Instead, he proposes that Agrofert, valued at $4.3bn (£3.3bn), will be placed in a trust managed by an autonomous trustee, where it will remain until his death. Upon that event, it will be inherited by his children.
This arrangement, he commented in a online address, went "exceeded" the demands of Czech law.
Unanswered Questions
The specific type of trust is still uncertain – a domestic trust, or one established overseas? The legal framework of a "fully independent trust" does not exist in Czech legislation, and an battalion of attorneys will be needed to craft an arrangement that is legally sound.
Doubts from Observers
Critics, including Transparency International, are still skeptical.
"Such a trust is not a solution," argued David Kotora, the head of Transparency International's Czech branch, in an statement.
"The divide is insufficient. [Babis] is familiar with the managers. He knows Agrofert's range of businesses. From an high office, even at a EU level, he could theoretically intervene in matters that would impact the industry in which Agrofert functions," Kotora cautioned.
Extensive Influence Extending Past Agrofert
But it's not just food – and it's not only Agrofert.
In the outskirts of Prague, a private health clinic stands near the O2 arena. While it is the property of 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 manages a chain of fertility centers, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The influence of Babis into every facet of Czech life is extensive. And as prime minister, for the second occasion, it is about to get broader.