Czech Billionaire Assumes Prime Ministerial Post, Vowing to Disentangle Business Holdings
Tycoon Andrej Babis has officially become the nation's new prime minister, with his complete ministerial team anticipated to take their posts in the coming days.
His appointment was contingent upon a fundamental stipulation from President Petr Pavel – a public commitment by Babis to give up oversight over his extensive food-processing, agriculture and chemicals group, Agrofert.
"I promise to be a prime minister who defends the interests of all our citizens, domestically and internationally," declared Babis after the ceremony at Prague Castle.
"A prime minister who will work to establish the Czech Republic the finest location to live on the entire planet."
High Aspirations and a Vast Corporate Footprint
These are grandiose goals, but Babis, 71, is familiar with large-scale thinking.
Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application to help shoppers avoid purchasing products made by the group's more than 200 subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – belongs to an Agrofert company, a negative symbol shows up.
Babis, who held the role of prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will include members of the right-wing SPD party and the Eurosceptic "Motorists for Themselves" party.
The Pledge of Separation
If he upholds his vow to withdraw from the company he built from scratch, he will stop gaining from the sale of any Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he asserts he will have no insight of the conglomerate's economic status, nor any capacity to affect its performance.
Administrative decisions on public tenders or subsidies – whether national or EU-funded – will be made independently of a company he will have relinquished ownership of or gain financially from, he emphasizes.
Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an autonomous trustee, where it will stay until his death. Then, it will pass to his children.
This arrangement, he remarked in a social media post, went "well above" the demands of Czech law.
Outstanding Issues
What kind of trust remains unclear – a Czech trust, or one based abroad? The notion of a "blind trust" is not recognized in Czech statutory law, and an battalion of attorneys will be required to craft an structure that works.
Criticism from Observers
Critics, including Transparency International, are still skeptical.
"A blind trust is not a solution," stated David Kotora, the head of Transparency International's Czech branch, in an comment.
"The divide is insufficient. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an executive position, even at a EU level, he could potentially influence in matters that would impact the industry in which Agrofert functions," Kotora cautioned.
Wide-Ranging Interests Beyond Agrofert
But it's not just food – and it's not just Agrofert.
In the eastern suburbs of Prague, a private health clinic stands near 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 operates a network of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.
The reach of Babis into every facet of Czech life is broad. And as prime minister, for the second time, it is poised to become more extensive.
