A Czech Wealthy Magnate Takes Prime Ministerial Post, Pledging to Cut Commercial Interests
Tycoon Andrej Babis has been sworn in as the Czech Republic's new premier, with his full cabinet slated to assume their roles within days.
His selection came after a central condition from President Petr Pavel – a public commitment by Babis to relinquish oversight over his vast agribusiness and chemical group, Agrofert.
"I promise to be a prime minister who upholds the interests of all our citizens, domestically and internationally," affirmed Babis following the ceremony at Prague Castle.
"A prime minister who will work to establish the Czech Republic the finest location to live on the face of the Earth."
Lofty Ambitions and a Pervasive Corporate Footprint
These are grandiose goals, but Babis, 71, is used to ambitious plans.
Agrofert is so thoroughly integrated in the Czech economic fabric that there is even a specialized application to help shoppers avoid purchasing products made by the group's numerous subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – is part of an Agrofert company, a negative symbol appears.
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 EU-skeptical "Drivers for Themselves" party.
The Commitment of Withdrawal
If he upholds his pledge to withdraw from the company he established, he will cease to profit from the sale of any Agrofert product – from frankfurters to fertiliser.
As prime minister, he claims he will have no information of the conglomerate's economic status, nor any capacity to influence its prospects.
Administrative decisions on government procurement or subsidies – whether Czech or European – will be made without regard to a company he will no longer own or profit from, he emphasizes.
Instead, he proposes that Agrofert, valued at $4.3bn (ÂŁ3.3bn), will be placed in a trust managed by an third-party manager, where it will remain until his death. Then, it will be inherited by his children.
This arrangement, he commented in a Facebook video, went "well above" the requirements of Czech law.
Clarification Needed
The specific type of trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The legal framework of a "fully independent trust" does not exist in Czech statutory law, and an army of lawyers will be needed to craft an structure that is legally sound.
Skepticism from Observers
Skeptics, including Transparency International, are still skeptical.
"A blind trust is not a solution," said David Kotora, the head of Transparency International's Czech branch, in an statement.
"True separation is absent. He is familiar with the managers. He knows Agrofert's range of businesses. From an high office, even at a European level, he could potentially influence in matters that would affect the sector in which Agrofert is active," 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, controlled by Babis.
Hartenberg also manages a chain of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.
The influence of Babis into every facet of Czech life is extensive. And as prime minister, for the second occasion, it is about to get more extensive.
