Czech Tycoon Secures PM Post, Pledging to Cut Commercial Empire

Tycoon Andrej Babis has been sworn in as the nation's new head of government, with his complete ministerial team anticipated to be appointed in the coming days.

His appointment followed a central stipulation from President Petr Pavel – a public assurance by Babis to relinquish oversight over his vast agribusiness and chemical group, Agrofert.

"I promise to be a prime minister who defends the interests of the entire populace, at home and abroad," affirmed Babis following the swearing-in at Prague Castle.

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

Grand Visions and a Far-Reaching Business Presence

These are lofty ambitions, but Babis, 71, is used to thinking big.

Agrofert is so deeply embedded in the Czech economic fabric that there is even a specialized application to help shoppers steer clear of 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 – belongs to an Agrofert company, a warning symbol shows up.

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

The Commitment of Divestment

If he honors his promise to separate himself from the company he founded and grew, he will no longer benefit from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he claims he will have no knowledge of the conglomerate's financial health, nor any ability to sway its fortunes.

Governmental decisions on government procurement or subsidies – whether national or EU-funded – will be made with no consideration for a company he will have severed ties with or profit from, he further notes.

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

This arrangement, he commented in a Facebook video, went "well above" the requirements of Czech law.

Unanswered Questions

The specific type of trust is still uncertain – a trust under Czech law, or one in a foreign jurisdiction? The legal framework of a "fully independent trust" does not exist in Czech statutory law, and an battalion of attorneys will be required to design an structure that is legally sound.

Skepticism from Observers

Watchdog organizations, including Transparency International, remain unconvinced.

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

"True separation is absent. He undoubtedly is acquainted with the managers. He knows Agrofert's range of businesses. From an executive position, even at a EU level, he could potentially influence in matters that would affect the sector in which Agrofert functions," Kotora warned.

Extensive Influence Beyond Agrofert

But it's not just 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 majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.

Hartenberg also operates a network 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 wide. And as prime minister, for the second occasion, it is set to grow even wider.