Czech Wealthy Magnate Takes Prime Ministerial Role, Promising to Cut Business Empire
Entrepreneur Andrej Babis has officially become the nation's new prime minister, with his complete ministerial team expected to take their posts in the coming days.
His confirmation came after a fundamental condition from President Petr Pavel – a public commitment by Babis to give up command over his sprawling agribusiness and chemical group, Agrofert.
"I commit to be a prime minister who champions the interests of the entire populace, at home and abroad," stated Babis following 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."
Lofty Ambitions and a Far-Reaching Corporate Footprint
These are lofty ambitions, but Babis, 71, is familiar with large-scale thinking.
Agrofert is so deeply embedded in the Czech commercial ecosystem that there is even a dedicated app to help shoppers bypass purchasing products made by the group's over two hundred subsidiaries.
If a product – for example, frankfurters from Kostelecké uzeniny or packaged bread from Penam – is part of an Agrofert company, a warning symbol appears.
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 far-right SPD and the EU-skeptical "Motorists for Themselves" party.
The Promise of Divestment
If he fulfills his vow to divest 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 information of the conglomerate's economic status, nor any capacity to sway its fortunes.
Administrative decisions on government procurement or subsidies – whether Czech or European – will be made independently of a company he will have severed ties with or profit from, he emphasizes.
Instead, he explains 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. At that point, it will be inherited by his children.
This arrangement, he commented in a social media post, went "well above" the requirements of Czech law.
Clarification Needed
The specific type of trust remains unclear – a trust under Czech law, or one established overseas? The concept of a "fully independent trust" has no basis in Czech legislation, and an team of legal experts will be necessary to design an solution that is legally sound.
Skepticism from Anti-Corruption Groups
Critics, including Transparency International, are still skeptical.
"A blind trust is not the answer," said David Kotora, the head of Transparency International's Czech branch, in an comment.
"The divide is insufficient. He is familiar with the managers. He knows Agrofert's range of businesses. From an executive position, even at a EU level, he could possibly act in matters that would impact the sector in which Agrofert is active," Kotora warned.
Broad Reach Extending Past Agrofert
But it's not only food – and it's not only 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 controlled by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.
Hartenberg also runs a chain of reproductive clinics, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.
The footprint of Babis into every facet of Czech life is broad. And as prime minister, for the second time, it is about to get even wider.
