A Czech Billionaire Takes PM Post, Promising to Disentangle Business Interests

Entrepreneur Andrej Babis has officially become the Czech Republic's new premier, with his complete ministerial team anticipated to take their posts shortly.

His selection was contingent upon a fundamental stipulation from President Petr Pavel – a official assurance by Babis to relinquish control over his extensive food-processing, agriculture and chemicals group, Agrofert.

"I commit to be a prime minister who upholds the interests of all our citizens, domestically and internationally," stated Babis after the ceremony at Prague Castle.

"A leader who will work to establish the Czech Republic the finest location to live on the entire planet."

Lofty Ambitions and a Vast Business Presence

These are grandiose goals, but Babis, 71, is familiar with ambitious plans.

Agrofert is so deeply embedded in the Czech economic fabric that there is even a dedicated app to help shoppers bypass purchasing products made by the group's over two hundred subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – is part of an Agrofert company, a thumbs-down symbol appears.

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

The Pledge of Withdrawal

If he upholds his vow to withdraw from the company he established, he will stop gaining from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he states he will have no knowledge of the conglomerate's economic status, nor any power to sway its prospects.

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

Instead, he proposes that Agrofert, valued at $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an autonomous trustee, where it will stay until his death. Upon that event, it will transfer to his children.

This arrangement, he remarked in a social media post, went "exceeded" the stipulations of Czech law.

Unanswered Questions

The legal nature of this trust is still uncertain – a trust under Czech law, or one in a foreign jurisdiction? The notion of a "blind trust" has no basis in Czech legislation, and an army of lawyers will be necessary to design an arrangement that works.

Skepticism from Observers

Critics, including Transparency International, are still skeptical.

"Such a trust is not a solution," stated David Kotora, the head of Transparency International's Czech branch, in an interview.

"The divide is insufficient. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an position of power, even at a EU level, he could theoretically intervene in matters that would affect the sector in which Agrofert is active," Kotora cautioned.

Wide-Ranging Interests Extending Past 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, controlled by Babis.

Hartenberg also manages a network of reproductive clinics, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.

The influence of Babis into all corners of Czech life is wide. And as prime minister, for the second time, it is set to grow more extensive.