A Czech Tycoon Secures PM Office, Vowing to Sever Commercial Interests
Entrepreneur Andrej Babis has been sworn in as the nation's new premier, with his complete ministerial team anticipated to take their posts shortly.
His selection followed a central condition from President Petr Pavel – a public vow by Babis to cede oversight over his extensive food-processing, agriculture and chemicals holding company, Agrofert.
"I promise to be a prime minister who upholds the interests of all our citizens, domestically and internationally," declared Babis after the swearing-in at Prague Castle.
"A leader who will work to transform the Czech Republic the best place to live on the face of the Earth."
High Aspirations and a Far-Reaching Business Presence
These are grandiose goals, but Babis, 71, is accustomed to large-scale thinking.
Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a specialized application 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 sliced bread from Penam – is part of an Agrofert company, a warning symbol shows up.
Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will include members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.
The Pledge of Separation
If he upholds his pledge to withdraw from the company he established, he will no longer benefit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he states he will have no insight of the conglomerate's fiscal condition, nor any power to sway its prospects.
State decisions on state contracts or subsidies – whether Czech or European – will be made with no consideration for 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 fiduciary structure managed by an independent administrator, where it will remain until his death. Then, it will pass to his children.
This arrangement, he remarked in a Facebook video, went "exceeded" the stipulations of Czech law.
Outstanding Issues
The specific type of trust has yet to be clarified – a trust under Czech law, or one based abroad? The legal framework of a "blind trust" has no basis in Czech legislation, and an battalion of attorneys will be required to craft an structure that is legally sound.
Criticism from Observers
Skeptics, including Transparency International, are still skeptical.
"A blind trust is an inadequate measure," said David Kotora, the head of Transparency International's Czech branch, in an statement.
"True separation is absent. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's range of businesses. From an high office, even at a European level, he could possibly act in matters that would impact the industry in which Agrofert is active," Kotora cautioned.
Broad Reach Beyond Agrofert
But it's not only 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, majority-owned by Babis.
Hartenberg also operates a network of reproductive clinics, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.
The reach of Babis into multiple areas of Czech life is broad. And as prime minister, for the second occasion, it is poised to become broader.