A Czech Tycoon Secures PM Role, Promising to Sever Business Interests

Tycoon Andrej Babis has officially become the nation's new premier, with his complete ministerial team expected to take their posts shortly.

His selection was contingent upon a key condition from President Petr Pavel – a official vow by Babis to cede oversight over his vast food-processing, agriculture and chemicals group, Agrofert.

"I promise to be a prime minister who upholds the interests of all our citizens, both locally and globally," stated Babis after the event at Prague Castle.

"A prime minister who will work to establish the Czech Republic the finest location to live on the whole globe."

High Aspirations and a Far-Reaching Business Presence

These are lofty ambitions, but Babis, 71, is accustomed to ambitious plans.

Agrofert is so deeply embedded in the Czech economic fabric that there is even a mobile tool 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 sliced bread from Penam – falls under an Agrofert company, a negative symbol shows up.

Babis, who held the role of prime minister for four years until 2021, has moved rightward in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.

The Commitment of Separation

If he honors his vow to withdraw from the company he founded and grew, he will no longer benefit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

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

Administrative decisions on government procurement or subsidies – whether Czech or European – will be made without regard to a company he will have relinquished ownership of or profit from, he further notes.

Instead, he says that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a trust managed by an third-party manager, where it will remain until his death. Upon that event, it will transfer to his children.

This arrangement, he commented in a online address, went "exceeded" the requirements of Czech law.

Clarification Needed

The specific type of trust has yet to be clarified – a Czech trust, or one established overseas? The legal framework of a "blind trust" has no basis in Czech legislation, and an team of legal experts will be necessary to devise an arrangement that works.

Doubts from Observers

Critics, including Transparency International, continue to doubt.

"Such a trust is not the answer," said David Kotora, the head of Transparency International's Czech branch, in an interview.

"True separation is absent. [Babis] is familiar with the managers. He knows Agrofert's portfolio. From an high office, even at a European level, he could possibly act in matters that would impact the industry in which Agrofert operates," Kotora advised.

Wide-Ranging Interests Beyond Agrofert

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

In the eastern suburbs of Prague, a private health clinic 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, majority-owned by Babis.

Hartenberg also manages a chain of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.

The influence of Babis into multiple areas of Czech life is wide. And as prime minister, for the second time, it is about to get more extensive.