Czech Billionaire Secures PM Post, Pledging to Sever Commercial Holdings

Wealthy businessman Andrej Babis has been sworn in as the Czech Republic's new premier, with his government anticipated to be appointed shortly.

His selection came after a fundamental condition from President Petr Pavel – a formal vow by Babis to cede command over his sprawling agribusiness and chemical holding company, Agrofert.

"I promise to be a prime minister who defends the interests of the entire populace, 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 face of the Earth."

Lofty Ambitions and a Pervasive Business Presence

These are grandiose goals, but Babis, 71, is familiar with large-scale thinking.

Agrofert is so thoroughly integrated in the Czech commercial ecosystem 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 is displayed.

Babis, who held the role of 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 "Motorists for Themselves" party.

The Commitment of Separation

If he upholds his pledge to separate himself from the company he built from scratch, he will no longer benefit from the sale of any Agrofert product – from frankfurters to fertiliser.

As prime minister, he asserts he will have no knowledge of the conglomerate's fiscal condition, nor any ability to sway its prospects.

Governmental decisions on public tenders or subsidies – whether national or EU-funded – will be made independently of a company he will no longer own or gain financially from, he adds.

Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an independent administrator, where it will remain until his death. At that point, it will be inherited by his children.

This arrangement, he commented in a social media post, went "far beyond" the demands of Czech law.

Outstanding Issues

What kind of trust has yet to be clarified – a trust under Czech law, or one in a foreign jurisdiction? The legal framework of a "blind trust" has no basis in Czech legislation, and an team of legal experts will be needed to craft an arrangement that is legally sound.

Criticism from Observers

Watchdog organizations, including Transparency International, continue to doubt.

"A blind trust is not the answer," stated David Kotora, the head of Transparency International's Czech branch, in an statement.

"True separation is absent. He obviously knows the managers. He knows Agrofert's portfolio. From an position of power, even at a European level, he could potentially influence in matters that would impact the sector in which Agrofert functions," Kotora cautioned.

Extensive Influence Extending Past Agrofert

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

In the eastern suburbs 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 operates a network of fertility centers, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.

The reach of Babis into every facet of Czech life is broad. And as prime minister, for the second time, it is set to grow broader.