Czech Tycoon Assumes Prime Ministerial Office, Promising to Cut Commercial Interests
Entrepreneur Andrej Babis has been sworn in as the nation's new premier, with his full cabinet slated to assume their roles within days.
His appointment came after a fundamental condition from President Petr Pavel – a official commitment by Babis to give up control over his vast food-processing, agriculture and chemicals holding company, Agrofert.
"I vow to be a prime minister who upholds the interests of every citizen, both locally and globally," stated Babis after the swearing-in at Prague Castle.
"A prime minister who will work to transform the Czech Republic the top destination to live on the entire planet."
High Aspirations and a Far-Reaching Corporate Footprint
These are lofty ambitions, but Babis, 71, is accustomed to large-scale thinking.
Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a dedicated app to help shoppers steer clear of purchasing products made by the group's over two hundred subsidiaries.
If a product – for example, frankfurters from Kostelecké uzeniny or packaged bread from Penam – belongs to an Agrofert company, a negative symbol is displayed.
Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will feature members of the far-right SPD and the EU-skeptical "Motorists for Themselves" party.
The Commitment of Withdrawal
If he honors his promise to withdraw from the company he established, he will cease to profit from the sale of a single Agrofert product – from frankfurters to fertiliser.
As prime minister, he asserts he will have no knowledge of the conglomerate's financial health, nor any power to influence its fortunes.
Governmental decisions on government procurement or subsidies – whether Czech or European – will be made independently of a company he will no longer own or gain financially from, he emphasizes.
Instead, he says that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an autonomous trustee, where it will remain until his death. Then, it will pass to his children.
This arrangement, he stated in a online address, went "far beyond" the demands of Czech law.
Outstanding Issues
What kind of trust is still uncertain – a trust under Czech law, or one in a foreign jurisdiction? The legal framework of a "fully independent trust" is not recognized in Czech statutory law, and an battalion of attorneys will be necessary to devise an arrangement that is legally sound.
Doubts from Watchdogs
Skeptics, including Transparency International, continue to doubt.
"A blind trust is an inadequate measure," said David Kotora, the head of Transparency International's Czech branch, in an comment.
"True separation is absent. He obviously knows the managers. He knows Agrofert's portfolio. From an executive position, even at a European level, he could theoretically intervene in matters that would impact the sector in which Agrofert functions," Kotora warned.
Broad Reach Extending Past Agrofert
But it's not just food – and it's not only Agrofert.
In the eastern suburbs of Prague, a private health clinic 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 manages a network of fertility centers, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.
The reach of Babis into every facet of Czech life is broad. And as prime minister, for the second occasion, it is set to grow even wider.