Czech Billionaire Assumes Prime Ministerial Post, Promising to Sever Commercial Empire

Wealthy businessman Andrej Babis has taken office as the Czech Republic's new head of government, with his government anticipated to assume their roles shortly.

His appointment followed a central stipulation from President Petr Pavel – a official vow by Babis to relinquish control over his sprawling agribusiness and chemical holding company, Agrofert.

"I commit to be a prime minister who upholds the interests of the entire populace, domestically and internationally," declared Babis following the ceremony at Prague Castle.

"A leader who will work to transform the Czech Republic the finest location to live on the whole globe."

Lofty Ambitions and a Pervasive Business Presence

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

Agrofert is so deeply embedded in the Czech economic fabric 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 was formerly prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will feature members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.

The Promise of Separation

If he upholds his vow to divest from the company he founded and grew, he will stop gaining 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 financial health, nor any ability to affect its performance.

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 profit from, he further notes.

Instead, he says that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an third-party manager, where it will stay until his death. Upon that event, it will transfer to his children.

This arrangement, he remarked in a online address, went "far beyond" the requirements of Czech law.

Clarification Needed

What kind of trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The notion of a "fully independent trust" has no basis in Czech statutory law, and an army of lawyers will be required to design an structure that works.

Skepticism from Anti-Corruption Groups

Critics, including Transparency International, remain unconvinced.

"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. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's holdings. From an executive position, even at a European level, he could theoretically intervene in matters that would affect the sector in which Agrofert is active," Kotora warned.

Wide-Ranging Interests Extending Past Agrofert

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

In the eastern suburbs of Prague, a medical facility stands near 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, majority-owned by Babis.

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

The footprint of Babis into every facet of Czech life is wide. And as prime minister, for the second time, it is poised to become even wider.