A Czech Tycoon Secures PM Office, Promising to Disentangle Commercial Interests
Wealthy businessman Andrej Babis has officially become the nation's new premier, with his government slated to assume their roles in the coming days.
His appointment was contingent upon a central stipulation from President Petr Pavel – a official vow by Babis to give up control over his extensive food-processing, agriculture and chemicals group, Agrofert.
"I vow to be a prime minister who defends the interests of every citizen, domestically and internationally," stated Babis after the swearing-in at Prague Castle.
"A leader who will work to transform the Czech Republic the finest location to live on the entire planet."
High Aspirations and a Far-Reaching Business Presence
These are lofty ambitions, but Babis, 71, is accustomed to large-scale thinking.
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, frankfurters 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 right-wing SPD party and the Eurosceptic "Motorists for Themselves" party.
The Commitment of Withdrawal
If he fulfills his pledge to withdraw from the company he established, he will cease to profit from the sale of any Agrofert product – from frankfurters to fertiliser.
As prime minister, he asserts he will have no information of the conglomerate's financial health, nor any capacity 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 relinquished ownership of or profit from, he further notes.
Instead, he says that Agrofert, valued at $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an independent administrator, where it will stay until his death. Then, it will pass to his children.
This arrangement, he stated in a social media post, went "far beyond" the requirements of Czech law.
Clarification Needed
The specific type of trust has yet to be clarified – a trust under Czech law, or one based abroad? The legal framework of a "fully independent trust" is not recognized in Czech statutory law, and an battalion of attorneys will be necessary to craft an arrangement that is legally sound.
Criticism from Observers
Watchdog organizations, including Transparency International, are still skeptical.
"A blind trust is not the answer," stated David Kotora, the head of Transparency International's Czech branch, in an statement.
"The divide is insufficient. He obviously knows the managers. He knows Agrofert's holdings. From an position of power, even at a European level, he could potentially influence in matters that would impact the sector in which Agrofert is active," Kotora cautioned.
Wide-Ranging Interests Extending Past 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 the property of 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 fertility centers, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.
The reach of Babis into all corners of Czech life is extensive. And as prime minister, for the second time, it is poised to become more extensive.
