A Czech Billionaire Secures Prime Ministerial Post, Pledging to Disentangle Commercial Empire

Tycoon Andrej Babis has taken office as the Czech Republic's new premier, with his government slated to be appointed within days.

His confirmation came after a key stipulation from President Petr Pavel – a formal assurance by Babis to cede command over his extensive agribusiness and chemical group, Agrofert.

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

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

Lofty Ambitions and a Far-Reaching Business Presence

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

Agrofert is so firmly entrenched in the Czech business landscape that there is even a mobile tool to help shoppers bypass purchasing products made by the group's more than 200 subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – falls under an Agrofert company, a thumbs-down symbol shows up.

Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will include members of the right-wing SPD party and the EU-skeptical "Motorists for Themselves" party.

The Promise of Divestment

If he upholds his pledge to separate himself from the company he established, he will no longer benefit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

As prime minister, he states he will have no insight of the conglomerate's financial health, nor any ability to affect its performance.

Governmental decisions on government procurement or subsidies – whether national or EU-funded – will be made without regard to a company he will have severed ties with or gain financially from, he adds.

Instead, he explains that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a trust managed by an independent administrator, where it will remain until his death. Upon that event, it will pass to his children.

This arrangement, he commented in a Facebook video, went "well above" the requirements of Czech law.

Clarification Needed

What kind of trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The concept of a "fully independent trust" does not exist in Czech legislation, and an army of lawyers will be necessary to craft an structure that works.

Skepticism from Watchdogs

Critics, including Transparency International, remain unconvinced.

"A blind trust is an inadequate measure," 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 portfolio. From an executive position, even at a European level, he could potentially influence in matters that would affect the sector in which Agrofert functions," Kotora warned.

Extensive Influence Beyond Agrofert

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

In the outskirts 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 manages a chain of fertility centers, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.

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