Czech Tycoon Takes Prime Ministerial Post, Promising to Cut Commercial Holdings

Wealthy businessman Andrej Babis has officially become the Czech Republic's new head of government, with his government expected to take their posts shortly.

His selection came after a key demand from President Petr Pavel – a formal assurance by Babis to relinquish command over his vast agribusiness and chemical conglomerate, Agrofert.

"I commit to be a prime minister who champions the interests of every citizen, at home and abroad," affirmed Babis following the ceremony at Prague Castle.

"A prime minister who will work to establish the Czech Republic the best place to live on the entire planet."

Lofty Ambitions and a Far-Reaching Business Presence

These are high-reaching aspirations, but Babis, 71, is familiar with thinking big.

Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application to help shoppers bypass purchasing products made by the group's numerous subsidiaries.

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

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

The Commitment of Withdrawal

If he upholds his promise to separate himself from the company he established, he will no longer benefit from the sale of any 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 affect its prospects.

Governmental decisions on government procurement or subsidies – whether national or EU-funded – will be made without regard to a company he will have relinquished ownership of or profit from, he emphasizes.

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

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

Unanswered Questions

The specific type of trust is still uncertain – a domestic trust, or one established overseas? The notion of a "blind trust" does not exist in Czech statutory law, and an battalion of attorneys will be required to devise an solution that is functional.

Skepticism from Observers

Skeptics, including Transparency International, remain unconvinced.

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

"There's no separation. He is familiar 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 impact the industry in which Agrofert functions," Kotora cautioned.

Extensive Influence Beyond Agrofert

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

In the outskirts of Prague, a medical facility towers over the O2 arena. While it is the property of 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 operates a chain of reproductive clinics, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.

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