A Czech Billionaire Assumes Prime Ministerial Office, Vowing to Cut Commercial Empire

Tycoon Andrej Babis has taken office as the nation's new premier, with his full cabinet expected to assume their roles within days.

His confirmation was contingent upon a central condition from President Petr Pavel – a formal assurance by Babis to give up control over his extensive food-processing, agriculture and chemicals group, Agrofert.

"I promise to be a prime minister who upholds the interests of every citizen, at home and abroad," stated Babis after the swearing-in at Prague Castle.

"A prime minister who will work to establish the Czech Republic the top destination to live on the face of the Earth."

Grand Visions and a Pervasive Corporate Footprint

These are high-reaching aspirations, but Babis, 71, is used to large-scale thinking.

Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a specialized application to help shoppers avoid 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 is displayed.

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 Eurosceptic "Motorists for Themselves" party.

The Commitment of Withdrawal

If he fulfills his promise 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 asserts he will have no information of the conglomerate's fiscal condition, nor any ability to affect 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 adds.

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

This arrangement, he remarked in a social media post, went "well above" the stipulations of Czech law.

Unanswered Questions

The legal nature of this trust remains unclear – a trust under Czech law, or one established overseas? The notion of a "fully independent trust" is not recognized in Czech legislation, and an battalion of attorneys will be necessary to devise an structure that is legally sound.

Doubts from Watchdogs

Critics, including Transparency International, continue to doubt.

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

"There's no separation. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's range of businesses. From an position of power, even at a EU level, he could potentially influence in matters that would affect the sector in which Agrofert is active," Kotora warned.

Extensive Influence Extending Past Agrofert

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

In the eastern suburbs of Prague, a medical facility 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, controlled by Babis.

Hartenberg also operates a chain of reproductive clinics, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.

The reach of Babis into all corners of Czech life is extensive. And as prime minister, for the second occasion, it is about to get even wider.