Czech Billionaire Assumes Prime Ministerial Post, Promising to Cut Commercial Empire

Entrepreneur Andrej Babis has been sworn in as the nation's new prime minister, with his government expected to take their posts in the coming days.

His selection followed a fundamental demand from President Petr Pavel – a public assurance by Babis to give up command over his vast agribusiness and chemical holding company, Agrofert.

"I commit to be a prime minister who defends the interests of the entire populace, domestically and internationally," affirmed Babis after the swearing-in at Prague Castle.

"A leader who will work to establish the Czech Republic the top destination to live on the face of the Earth."

Grand Visions and a Pervasive Business Presence

These are high-reaching aspirations, but Babis, 71, is accustomed to large-scale thinking.

Agrofert is so deeply embedded in the Czech economic fabric that there is even a dedicated app to help shoppers steer clear of purchasing products made by the group's numerous subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or packaged bread from Penam – is part of an Agrofert company, a negative symbol shows up.

Babis, who previously served as prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will feature members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.

The Pledge of Divestment

If he upholds his pledge to withdraw from the company he built from scratch, 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 knowledge of the conglomerate's economic status, nor any ability to affect its prospects.

Administrative decisions on state contracts or subsidies – whether Czech or European – will be made without regard to a company he will have relinquished ownership of or gain financially from, he adds.

Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a trust managed by an autonomous trustee, where it will remain until his death. At that point, it will transfer to his children.

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

Clarification Needed

The legal nature of this trust remains unclear – a trust under Czech law, or one based abroad? The concept of a "blind trust" does not exist in Czech statutory law, and an battalion of attorneys will be needed to craft an arrangement that is functional.

Criticism from Watchdogs

Critics, including Transparency International, remain unconvinced.

"A blind trust is not the answer," stated David Kotora, the head of Transparency International's Czech branch, in an statement.

"The divide is insufficient. [Babis] obviously knows the managers. He knows Agrofert's portfolio. From an high office, even at a European level, he could potentially influence in matters that would affect the industry in which Agrofert functions," Kotora advised.

Wide-Ranging Interests Beyond Agrofert

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

In the outskirts of Prague, a medical facility stands near 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 runs a network of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.

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