A Czech Tycoon Assumes Prime Ministerial Role, Pledging to Sever Commercial Holdings
Tycoon Andrej Babis has officially become the nation's new premier, with his full cabinet slated to take their posts shortly.
His appointment was contingent upon a central demand from President Petr Pavel – a formal vow by Babis to relinquish command over his sprawling agribusiness and chemical conglomerate, Agrofert.
"I commit to be a prime minister who upholds the interests of all our citizens, both locally and globally," affirmed Babis following the swearing-in at Prague Castle.
"A leader who will work to transform the Czech Republic the top destination to live on the whole globe."
High Aspirations and a Vast Business Presence
These are high-reaching aspirations, but Babis, 71, is used to large-scale thinking.
Agrofert is so deeply embedded in the Czech business landscape that there is even a mobile tool 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 packaged bread from Penam – falls under an Agrofert company, a thumbs-down symbol is displayed.
Babis, who previously served as 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 "Motorists for Themselves" party.
The Commitment of Divestment
If he fulfills his promise to separate himself from the company he founded and grew, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser.
As prime minister, he asserts he will have no information of the conglomerate's financial health, nor any ability to sway its fortunes.
Administrative decisions on government procurement or subsidies – whether Czech or European – will be made without regard to a company he will no longer own or gain financially from, he further notes.
Instead, he says that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an independent administrator, where it will stay until his death. Upon that event, it will pass to his children.
This arrangement, he stated in a online address, went "well above" the requirements of Czech law.
Unanswered Questions
What kind of trust has yet to be clarified – a domestic trust, or one based abroad? The legal framework of a "fully independent trust" does not exist in Czech legislation, and an battalion of attorneys will be required to craft an arrangement that is functional.
Doubts from Anti-Corruption Groups
Skeptics, including Transparency International, continue to doubt.
"Such a trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an comment.
"The divide is insufficient. [Babis] obviously knows the managers. He knows Agrofert's portfolio. From an position of power, even at a EU level, he could theoretically intervene in matters that would affect the industry in which Agrofert functions," Kotora warned.
Wide-Ranging Interests Extending Past Agrofert
But it's not just food – and it's not only Agrofert.
In the eastern suburbs of Prague, a medical facility stands near 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 fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.
The influence of Babis into every facet of Czech life is extensive. And as prime minister, for the second time, it is poised to become more extensive.
