Czech Billionaire Takes PM Post, Pledging to Sever Commercial Interests

Entrepreneur Andrej Babis has officially become the Czech Republic's new premier, with his full cabinet slated to take their posts shortly.

His confirmation followed a fundamental stipulation from President Petr Pavel – a formal assurance by Babis to cede control over his vast food-processing, agriculture and chemicals holding company, Agrofert.

"I vow to be a prime minister who champions the interests of all our citizens, both locally and globally," declared Babis following 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."

Grand Visions and a Far-Reaching Business Presence

These are lofty ambitions, but Babis, 71, is familiar with thinking big.

Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a mobile tool to help shoppers bypass purchasing products made by the group's numerous subsidiaries.

If a product – for example, Viennese-style sausages from Kostelecké uzeniny or packaged bread from Penam – belongs to an Agrofert company, a thumbs-down symbol is displayed.

Babis, who was formerly prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will feature members of the right-wing SPD party and the EU-skeptical "Motorists for Themselves" party.

The Pledge of Withdrawal

If he honors his pledge to divest from the company he founded and grew, he will cease to profit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

As prime minister, he claims he will have no information of the conglomerate's financial health, nor any capacity to sway its fortunes.

Administrative decisions on government procurement or subsidies – whether national or EU-funded – will be made with no consideration for a company he will no longer own or profit from, he emphasizes.

Instead, he says that Agrofert, valued at $4.3bn (£3.3bn), will be placed in a trust managed by an autonomous trustee, where it will stay until his death. At that point, it will transfer to his children.

This arrangement, he stated in a Facebook video, went "well above" the demands of Czech law.

Outstanding Issues

The legal nature of this trust has yet to be clarified – a domestic trust, or one established overseas? The notion of a "blind trust" does not exist in Czech statutory law, and an team of legal experts will be necessary to devise an arrangement that is legally sound.

Skepticism from Anti-Corruption Groups

Critics, including Transparency International, are still skeptical.

"Such a trust is an inadequate measure," said David Kotora, the head of Transparency International's Czech branch, in an comment.

"There's no separation. He undoubtedly is acquainted with the managers. He knows Agrofert's portfolio. From an position of power, even at a EU level, he could potentially influence in matters that would impact the sector in which Agrofert is active," Kotora warned.

Extensive Influence Extending Past Agrofert

But it's not only food – and it's not just Agrofert.

In the eastern suburbs of Prague, a medical facility towers over the O2 arena. While it is owned by 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 chain of fertility centers, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.

The influence of Babis into every facet of Czech life is broad. And as prime minister, for the second time, it is set to grow broader.