A Czech Billionaire Secures Prime Ministerial Office, Pledging to Cut Commercial Empire
Wealthy businessman Andrej Babis has been sworn in as the Czech Republic's new prime minister, with his government expected to take their posts within days.
His confirmation followed a central condition from President Petr Pavel – a formal vow by Babis to give up command over his vast food-processing, agriculture and chemicals holding company, Agrofert.
"I vow to be a prime minister who defends the interests of every citizen, at home and abroad," declared Babis after the swearing-in at Prague Castle.
"A prime minister who will work to transform the Czech Republic the best place 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 large-scale thinking.
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 numerous subsidiaries.
If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – is part of an Agrofert company, a negative symbol is displayed.
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 include members of the right-wing SPD party and the EU-skeptical "Motorists for Themselves" party.
The Pledge of Divestment
If he upholds his promise to withdraw from the company he built from scratch, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser.
As prime minister, he states he will have no knowledge of the conglomerate's financial health, nor any power to influence its prospects.
Governmental decisions on government procurement or subsidies – whether Czech or European – will be made with no consideration for a company he will have relinquished ownership of or gain financially from, he emphasizes.
Instead, he says that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an independent administrator, where it will stay until his death. Then, it will pass to his children.
This arrangement, he commented in a social media post, went "exceeded" the requirements of Czech law.
Outstanding Issues
The specific type of trust has yet to be clarified – a domestic trust, or one established overseas? The legal framework of a "fully independent trust" does not exist in Czech legislation, and an battalion of attorneys will be required to devise an solution that is legally sound.
Skepticism from Watchdogs
Skeptics, including Transparency International, continue to doubt.
"A blind trust is an inadequate measure," stated David Kotora, the head of Transparency International's Czech branch, in an interview.
"The divide is insufficient. He is familiar with the managers. He knows Agrofert's range of businesses. From an high office, even at a EU level, he could potentially influence in matters that would impact the sector in which Agrofert operates," Kotora advised.
Broad Reach Beyond Agrofert
But it's not only food – and it's not just Agrofert.
In the outskirts of Prague, a medical facility towers over the O2 arena. While it is owned by a company called FutureLife a.s, that company is controlled by Hartenberg Holding, and Hartenberg Holding is, in turn, majority-owned by Babis.
Hartenberg also operates a network of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The reach of Babis into every facet of Czech life is wide. And as prime minister, for the second time, it is set to grow more extensive.