A Czech Tycoon Secures PM Office, Pledging to Sever Commercial Interests

Wealthy businessman Andrej Babis has been sworn in as the nation's new prime minister, with his complete ministerial team anticipated to assume their roles shortly.

His appointment came after a fundamental demand from President Petr Pavel – a formal assurance by Babis to cede oversight over his vast agribusiness and chemical holding company, Agrofert.

"I promise to be a prime minister who champions the interests of every citizen, both locally and globally," declared Babis after the swearing-in at Prague Castle.

"A prime minister who will work to transform the Czech Republic the finest location to live on the face of the Earth."

High Aspirations and a Far-Reaching Business Presence

These are lofty ambitions, but Babis, 71, is accustomed to ambitious plans.

Agrofert is so deeply embedded in the Czech business landscape that there is even a dedicated app 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 shows up.

Babis, who held the role of prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.

The Pledge of Divestment

If he fulfills his promise to separate himself from the company he founded and grew, he will cease to profit from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he states he will have no insight of the conglomerate's financial health, nor any power to affect its prospects.

Governmental decisions on state contracts or subsidies – whether national or EU-funded – will be made without regard to a company he will have relinquished ownership of or profit from, he further notes.

Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an third-party manager, where it will remain until his death. At that point, it will transfer to his children.

This arrangement, he stated in a online address, went "exceeded" the demands of Czech law.

Unanswered Questions

The specific type of trust is still uncertain – a Czech trust, or one based abroad? The concept of a "blind trust" does not exist in Czech statutory law, and an army of lawyers will be required to devise an arrangement that is legally sound.

Skepticism from Anti-Corruption Groups

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 undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an executive position, even at a European level, he could potentially influence in matters that would affect the sector in which Agrofert is active," Kotora warned.

Extensive Influence Beyond Agrofert

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

In the outskirts of Prague, a private health clinic 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 fertility centers, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.

The influence of Babis into all corners of Czech life is wide. And as prime minister, for the second time, it is about to get more extensive.