A Czech Billionaire Secures PM Post, Vowing to Sever Corporate Empire
Tycoon Andrej Babis has taken office as the nation's new premier, with his full cabinet slated to be appointed shortly.
His selection was contingent upon a central condition from President Petr Pavel – a official commitment by Babis to cede control over his vast agribusiness and chemical conglomerate, Agrofert.
"I promise to be a prime minister who upholds the interests of every citizen, both locally and globally," affirmed Babis following the ceremony at Prague Castle.
"A leader who will work to establish the Czech Republic the finest location to live on the whole globe."
High Aspirations and a Pervasive Corporate Footprint
These are lofty ambitions, but Babis, 71, is familiar with large-scale thinking.
Agrofert is so thoroughly integrated in the Czech business landscape that there is even a dedicated app to help shoppers steer clear of purchasing products made by the group's more than 200 subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – is part of an Agrofert company, a thumbs-down symbol appears.
Babis, who previously served as prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.
The Promise of Withdrawal
If he fulfills his vow to divest from the company he established, he will stop gaining 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 capacity to influence 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 profit from, he emphasizes.
Instead, he says that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a trust managed by an independent administrator, where it will stay until his death. At that point, it will transfer to his children.
This arrangement, he remarked in a Facebook video, went "exceeded" the demands of Czech law.
Clarification Needed
The legal nature of this trust remains unclear – a Czech trust, or one in a foreign jurisdiction? The legal framework of a "blind trust" does not exist in Czech statutory law, and an team of legal experts will be needed to craft an structure that is functional.
Doubts from Observers
Critics, including Transparency International, continue to doubt.
"Such a trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an statement.
"There's no separation. He undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an position of power, even at a EU level, he could possibly act in matters that would affect the industry in which Agrofert is active," Kotora warned.
Extensive Influence Beyond Agrofert
But it's not just food – and it's not only Agrofert.
In the outskirts of Prague, a private health clinic towers over the O2 arena. While it is owned by 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 runs a chain of reproductive clinics, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.
The footprint of Babis into multiple areas of Czech life is extensive. And as prime minister, for the second occasion, it is about to get more extensive.
