A Czech Wealthy Magnate Assumes PM Post, Promising to Sever Business Interests

Wealthy businessman Andrej Babis has been sworn in as the Czech Republic's new prime minister, with his full cabinet anticipated to take their posts in the coming days.

His selection was contingent upon a key condition from President Petr Pavel – a official assurance by Babis to give up control over his vast agribusiness and chemical conglomerate, Agrofert.

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

"A leader who will work to establish the Czech Republic the best place to live on the whole globe."

Lofty Ambitions and a Far-Reaching Business Presence

These are grandiose goals, but Babis, 71, is familiar with ambitious plans.

Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application to help shoppers steer clear of 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 adopted more right-leaning positions in recent years and his cabinet will incorporate members of the far-right SPD and the Eurosceptic "Motorists for Themselves" party.

The Promise of Withdrawal

If he honors his promise to separate himself from the company he founded and grew, he will cease to profit from the sale of a single 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 affect its performance.

State decisions on state contracts or subsidies – whether national or EU-funded – will be made independently of a company he will have severed ties with or gain financially from, he emphasizes.

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 stay until his death. At that point, it will be inherited by his children.

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

Outstanding Issues

The legal nature of this trust remains unclear – a trust under Czech law, or one established overseas? The concept of a "fully independent trust" does not exist in Czech statutory law, and an army of lawyers will be necessary to craft an structure that works.

Skepticism from Anti-Corruption Groups

Critics, including Transparency International, remain unconvinced.

"A blind trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an comment.

"There's no separation. [Babis] obviously knows the managers. He knows Agrofert's holdings. From an high office, even at a European level, he could theoretically intervene in matters that would affect the sector in which Agrofert is active," Kotora advised.

Extensive Influence Beyond Agrofert

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

In the outskirts of Prague, a medical facility stands near the O2 arena. While it is owned by 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 chain of fertility centers, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex.

The reach of Babis into multiple areas of Czech life is broad. And as prime minister, for the second time, it is poised to become more extensive.