A Czech Wealthy Magnate Assumes Prime Ministerial Office, Promising to Cut Commercial Interests

Wealthy businessman Andrej Babis has been sworn in as the nation's new prime minister, with his government expected to assume their roles within days.

His confirmation came after a central condition from President Petr Pavel – a official vow by Babis to give up command over his vast food-processing, agriculture and chemicals conglomerate, Agrofert.

"I promise to be a prime minister who defends the interests of all our citizens, at home and abroad," 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."

Grand Visions and a Pervasive Corporate Footprint

These are lofty ambitions, but Babis, 71, is used to ambitious plans.

Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application to help shoppers steer clear of 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 – belongs to an Agrofert company, a negative symbol shows up.

Babis, who previously served as prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Motorists for Themselves" party.

The Promise of Divestment

If he fulfills his promise to separate himself from the company he established, he will stop gaining from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

As prime minister, he states he will have no knowledge of the conglomerate's economic status, nor any ability to influence its performance.

Governmental decisions on public tenders or subsidies – whether national or EU-funded – will be made independently of a company he will no longer own or gain financially from, he adds.

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 remain until his death. Then, it will be inherited by his children.

This arrangement, he stated in a online address, went "exceeded" the requirements of Czech law.

Clarification Needed

The specific type of trust is still uncertain – a trust under Czech law, or one based abroad? The legal framework of a "fully independent trust" does not exist in Czech statutory law, and an battalion of attorneys will be required to design an arrangement that is functional.

Criticism from Watchdogs

Watchdog organizations, including Transparency International, continue to doubt.

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

"There's no separation. [Babis] is familiar with the managers. He knows Agrofert's range of businesses. From an high office, even at a European level, he could potentially influence in matters that would impact the sector in which Agrofert operates," Kotora warned.

Wide-Ranging Interests Beyond Agrofert

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

In the outskirts of Prague, a private health clinic 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, majority-owned 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 multiple areas of Czech life is broad. And as prime minister, for the second occasion, it is set to grow broader.