A Czech Wealthy Magnate Secures PM Office, Promising to Disentangle Commercial Interests

Entrepreneur Andrej Babis has officially become the Czech Republic's new premier, with his government slated to be appointed within days.

His selection came after a fundamental stipulation from President Petr Pavel – a public assurance by Babis to relinquish command over his vast food-processing, agriculture and chemicals group, Agrofert.

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

"A prime minister who will work to make the Czech Republic the best place to live on the whole globe."

Lofty Ambitions and a Pervasive 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 specialized application to help shoppers bypass 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 warning symbol shows up.

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 incorporate members of the right-wing SPD party and the EU-skeptical "Motorists for Themselves" party.

The Pledge of Separation

If he upholds his vow to divest from the company he established, he will cease to profit 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 economic status, nor any ability to influence its prospects.

Administrative decisions on public tenders or subsidies – whether national or EU-funded – will be made independently of a company he will have severed ties with or gain financially from, he further notes.

Instead, he proposes 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. Upon that event, it will transfer to his children.

This arrangement, he stated in a social media post, went "well above" the demands of Czech law.

Unanswered Questions

What kind of trust has yet to be clarified – a domestic trust, or one based abroad? The concept of a "blind trust" does not exist in Czech statutory law, and an battalion of attorneys will be needed to craft an arrangement that works.

Criticism from Watchdogs

Critics, including Transparency International, remain unconvinced.

"A blind trust is an inadequate measure," stated David Kotora, the head of Transparency International's Czech branch, in an statement.

"There's no separation. He undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an high office, even at a EU level, he could possibly act in matters that would impact the industry in which Agrofert functions," Kotora warned.

Extensive Influence Beyond Agrofert

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

Hartenberg also runs a chain of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.

The footprint of Babis into multiple areas of Czech life is extensive. And as prime minister, for the second occasion, it is set to grow even wider.