Czech Wealthy Magnate Takes PM Post, Vowing to Cut Business Holdings
Tycoon Andrej Babis has officially become the Czech Republic's new premier, with his complete ministerial team anticipated to be appointed shortly.
His selection followed a central condition from President Petr Pavel – a official commitment by Babis to give up command over his vast food-processing, agriculture and chemicals conglomerate, Agrofert.
"I promise to be a prime minister who champions the interests of all our citizens, both locally and globally," affirmed Babis after the ceremony at Prague Castle.
"A leader who will work to make the Czech Republic the finest location to live on the entire planet."
High Aspirations and a Pervasive Business Presence
These are grandiose goals, but Babis, 71, is used to large-scale thinking.
Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application 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 packaged bread from Penam – is part of 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 include members of the right-wing SPD party and the EU-skeptical "Drivers for Themselves" party.
The Promise of Separation
If he fulfills his pledge to divest from the company he established, he will cease to profit from the sale of any Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he states he will have no information of the conglomerate's economic status, nor any capacity to affect its prospects.
Governmental decisions on public tenders or subsidies – whether Czech or European – will be made independently of a company he will have severed ties with or gain financially from, he further notes.
Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an autonomous trustee, where it will stay until his death. Then, it will be inherited by his children.
This arrangement, he commented in a online address, went "exceeded" the stipulations of Czech law.
Clarification Needed
The specific type of trust remains unclear – a trust under Czech law, or one in a foreign jurisdiction? The notion of a "blind trust" has no basis in Czech statutory law, and an battalion of attorneys will be required to craft an arrangement that is functional.
Skepticism from Anti-Corruption Groups
Critics, including Transparency International, remain unconvinced.
"A blind trust is not the answer," stated David Kotora, the head of Transparency International's Czech branch, in an interview.
"There's no separation. [Babis] is familiar with the managers. He knows Agrofert's holdings. From an position of power, even at a EU level, he could theoretically intervene in matters that would impact the industry in which Agrofert functions," Kotora cautioned.
Extensive Influence Beyond Agrofert
But it's not just food – and it's not just Agrofert.
In the outskirts of Prague, a private health clinic 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 manages a chain of reproductive clinics, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.
The influence of Babis into every facet of Czech life is wide. And as prime minister, for the second occasion, it is poised to become even wider.
