Czech Tycoon Assumes PM Post, Pledging to Sever Corporate Interests

Wealthy businessman Andrej Babis has taken office as the Czech Republic's new premier, with his complete ministerial team slated to assume their roles shortly.

His selection came after a fundamental condition from President Petr Pavel – a formal commitment by Babis to relinquish oversight over his vast food-processing, agriculture and chemicals conglomerate, Agrofert.

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

"A prime minister who will work to transform the Czech Republic the best place to live on the entire planet."

High Aspirations and a Pervasive Business Presence

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

Agrofert is so deeply embedded in the Czech business landscape that there is even a mobile tool to help shoppers steer clear of purchasing products made by the group's numerous 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 adopted more right-leaning positions in recent years and his cabinet will feature members of the far-right SPD and the EU-skeptical "Motorists for Themselves" party.

The Promise of Separation

If he honors his vow to divest from the company he built from scratch, he will cease to profit from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he asserts he will have no information of the conglomerate's fiscal condition, nor any capacity to sway its performance.

State decisions on public tenders 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 further notes.

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

This arrangement, he stated in a social media post, went "well above" the demands of Czech law.

Unanswered Questions

The specific type of trust is still uncertain – a Czech trust, or one in a foreign jurisdiction? The concept of a "blind trust" has no basis in Czech statutory law, and an battalion of attorneys will be required to devise an structure that is legally sound.

Criticism from Watchdogs

Watchdog organizations, 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 comment.

"There's no separation. [Babis] obviously knows the managers. He knows Agrofert's range of businesses. From an high office, even at a European level, he could possibly act in matters that would affect the industry in which Agrofert is active," Kotora warned.

Extensive Influence 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 runs a network of reproductive clinics, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.

The influence of Babis into all corners of Czech life is extensive. And as prime minister, for the second time, it is poised to become even wider.