Czech Billionaire Assumes PM Post, Vowing to Cut Business Interests

Tycoon Andrej Babis has been sworn in as the Czech Republic's new premier, with his complete ministerial team anticipated to take their posts within days.

His appointment came after a central stipulation from President Petr Pavel – a official assurance by Babis to relinquish oversight over his vast agribusiness and chemical holding company, Agrofert.

"I commit to be a prime minister who upholds the interests of every citizen, both locally and globally," declared Babis following the ceremony at Prague Castle.

"A leader who will work to make the Czech Republic the top destination to live on the whole globe."

High Aspirations and a Vast Business Presence

These are grandiose goals, but Babis, 71, is familiar with ambitious plans.

Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application to help shoppers steer clear of purchasing products made by the group's numerous subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or packaged bread from Penam – belongs to an Agrofert company, a warning symbol shows up.

Babis, who was formerly prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Motorists for Themselves" party.

The Commitment of Withdrawal

If he upholds his pledge to withdraw from the company he established, he will stop gaining from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

As prime minister, he states he will have no knowledge of the conglomerate's financial health, nor any capacity to influence its performance.

Governmental decisions on government procurement or subsidies – whether Czech or European – will be made independently of a company he will have severed ties with or profit from, he further notes.

Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an third-party manager, where it will remain until his death. Upon that event, it will be inherited by his children.

This arrangement, he remarked in a Facebook video, went "well above" the demands of Czech law.

Unanswered Questions

What kind of trust remains unclear – a Czech trust, or one established overseas? The notion of a "fully independent trust" is not recognized in Czech statutory law, and an army of lawyers will be needed to craft an solution that works.

Skepticism 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 comment.

"There's no separation. He obviously knows the managers. He knows Agrofert's range of businesses. From an executive position, even at a EU level, he could potentially influence in matters that would affect the sector in which Agrofert functions," Kotora warned.

Wide-Ranging Interests Extending Past Agrofert

But it's not just food – and it's not just 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 majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.

Hartenberg also runs a chain of fertility centers, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.

The footprint of Babis into all corners of Czech life is extensive. And as prime minister, for the second occasion, it is about to get broader.