Czech Wealthy Magnate Assumes PM Office, Vowing to Cut Commercial Holdings
Entrepreneur Andrej Babis has taken office as the nation's new premier, with his complete ministerial team expected to take their posts shortly.
His selection was contingent upon a fundamental stipulation from President Petr Pavel – a formal assurance by Babis to cede command over his sprawling agribusiness and chemical conglomerate, Agrofert.
"I promise to be a prime minister who defends the interests of the entire populace, both locally and globally," stated Babis after the event at Prague Castle.
"A leader who will work to make the Czech Republic the finest location to live on the face of the Earth."
Grand Visions and a Pervasive Business Presence
These are high-reaching aspirations, but Babis, 71, is familiar with large-scale thinking.
Agrofert is so thoroughly integrated in the Czech economic fabric that there is even a dedicated app to help shoppers avoid 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 – is part of an Agrofert company, a negative symbol is displayed.
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 Eurosceptic "Motorists for Themselves" party.
The Commitment of Separation
If he fulfills his promise 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 states he will have no information of the conglomerate's fiscal condition, nor any power to sway its performance.
State decisions on public tenders or subsidies – whether national or EU-funded – 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, valued at $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an third-party manager, where it will remain until his death. Then, it will transfer to his children.
This arrangement, he remarked in a social media post, went "far beyond" the stipulations of Czech law.
Unanswered Questions
The specific type of trust has yet to be clarified – a Czech trust, or one in a foreign jurisdiction? The concept of a "blind trust" has no basis in Czech statutory law, and an army of lawyers will be required to devise an structure that is legally sound.
Skepticism from Observers
Watchdog organizations, including Transparency International, are still skeptical.
"A blind trust is not a solution," argued David Kotora, the head of Transparency International's Czech branch, in an interview.
"True separation is absent. He is familiar with the managers. He knows Agrofert's portfolio. From an executive position, even at a EU level, he could possibly act in matters that would impact the industry in which Agrofert functions," Kotora cautioned.
Wide-Ranging Interests Extending Past Agrofert
But it's not only food – and it's not only Agrofert.
In the outskirts 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, majority-owned by Babis.
Hartenberg also manages a chain of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The reach of Babis into every facet of Czech life is broad. And as prime minister, for the second time, it is about to get more extensive.