Czech Tycoon Takes PM Office, Pledging to Disentangle Business Empire
Entrepreneur Andrej Babis has been sworn in as the nation's new head of government, with his complete ministerial team expected to be appointed in the coming days.
His confirmation came after a key condition from President Petr Pavel – a formal vow by Babis to cede oversight over his sprawling agribusiness and chemical holding company, Agrofert.
"I commit to be a prime minister who defends the interests of every citizen, both locally and globally," affirmed Babis following the ceremony at Prague Castle.
"A leader who will work to transform the Czech Republic the top destination to live on the whole globe."
High Aspirations and a Far-Reaching Business Presence
These are grandiose goals, 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 more than 200 subsidiaries.
If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – belongs to an Agrofert company, a thumbs-down symbol is displayed.
Babis, who previously served as prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will include members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.
The Promise of Separation
If he upholds his pledge to withdraw from the company he established, he will cease to profit from the sale of any Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he states he will have no information of the conglomerate's economic status, nor any power to influence its fortunes.
State 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 emphasizes.
Instead, he says that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a trust managed by an third-party manager, where it will remain until his death. Upon that event, it will transfer to his children.
This arrangement, he remarked in a Facebook video, went "exceeded" the demands of Czech law.
Clarification Needed
The legal nature of this trust has yet to be clarified – a trust under Czech law, or one established overseas? The notion of a "blind trust" is not recognized in Czech legislation, and an battalion of attorneys will be necessary to design an structure that is functional.
Doubts from Watchdogs
Watchdog organizations, including Transparency International, remain unconvinced.
"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 undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an high office, even at a European level, he could possibly act in matters that would impact the industry in which Agrofert functions," Kotora cautioned.
Wide-Ranging Interests Beyond Agrofert
But it's not only food – and it's not just Agrofert.
In the eastern suburbs of Prague, a medical facility towers over the O2 arena. While it is owned by a company called FutureLife a.s, that company is majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.
Hartenberg also operates a chain of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The footprint of Babis into all corners of Czech life is broad. And as prime minister, for the second occasion, it is set to grow even wider.