Czech Wealthy Magnate Assumes PM Role, Vowing to Sever Commercial Interests

Wealthy businessman Andrej Babis has been sworn in as the nation's new premier, with his complete ministerial team anticipated to assume their roles in the coming days.

His selection came after a fundamental condition from President Petr Pavel – a official assurance by Babis to cede command over his extensive food-processing, agriculture and chemicals holding company, Agrofert.

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

"A leader who will work to transform the Czech Republic the best place to live on the face of the Earth."

Lofty Ambitions and a Far-Reaching Business Presence

These are lofty ambitions, but Babis, 71, is used to large-scale thinking.

Agrofert is so deeply embedded in the Czech commercial ecosystem that there is even a dedicated app to help shoppers avoid purchasing products made by the group's numerous subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – belongs to 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 include members of the far-right SPD and the Eurosceptic "Motorists for Themselves" party.

The Pledge of Withdrawal

If he fulfills his vow to withdraw from the company he established, he will stop gaining 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 economic status, nor any capacity to affect its prospects.

Administrative decisions on public tenders or subsidies – whether Czech or European – will be made with no consideration for a company he will no longer own or gain financially from, he adds.

Instead, he says that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an third-party manager, where it will remain until his death. Then, it will pass to his children.

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

Unanswered Questions

What kind of trust has yet to be clarified – a trust under Czech law, or one established overseas? The legal framework of a "fully independent trust" has no basis in Czech legislation, and an army of lawyers will be necessary to design an solution that works.

Criticism from Observers

Skeptics, including Transparency International, remain unconvinced.

"Such a trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an statement.

"There's no separation. [Babis] obviously knows the managers. He knows Agrofert's portfolio. From an executive position, even at a European level, he could theoretically intervene in matters that would impact the sector in which Agrofert operates," Kotora advised.

Wide-Ranging Interests Beyond Agrofert

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

In the outskirts of Prague, a medical facility towers over 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, majority-owned by Babis.

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

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