Czech Billionaire Secures Prime Ministerial Post, Promising to Cut Business Interests

Wealthy businessman Andrej Babis has taken office as the nation's new prime minister, with his government slated to take their posts within days.

His confirmation came after a key demand from President Petr Pavel – a formal commitment by Babis to give up control over his sprawling food-processing, agriculture and chemicals conglomerate, Agrofert.

"I commit to be a prime minister who upholds the interests of every citizen, both locally and globally," affirmed Babis after the swearing-in at Prague Castle.

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

High Aspirations and a Vast Corporate Footprint

These are high-reaching aspirations, but Babis, 71, is used to thinking big.

Agrofert is so thoroughly integrated in the Czech business landscape that there is even a specialized application to help shoppers bypass 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 thumbs-down symbol appears.

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 EU-skeptical "Drivers for Themselves" party.

The Commitment of Separation

If he honors his vow to separate himself from the company he established, he will no longer benefit from the sale of any Agrofert product – ranging from processed meats to agricultural chemicals.

As prime minister, he asserts he will have no insight of the conglomerate's financial health, nor any capacity to influence its performance.

Administrative decisions on state contracts or subsidies – whether national or EU-funded – will be made independently of a company he will have relinquished ownership of or gain financially from, he adds.

Instead, he proposes that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an independent administrator, where it will stay until his death. Then, it will transfer to his children.

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

Outstanding Issues

The legal nature of this trust remains unclear – a Czech trust, or one established overseas? The concept of a "blind trust" does not exist in Czech statutory law, and an battalion of attorneys will be necessary to design an structure that works.

Criticism from Watchdogs

Critics, including Transparency International, continue to doubt.

"A blind trust is not a solution," said David Kotora, the head of Transparency International's Czech branch, in an interview.

"True separation is absent. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's range of businesses. From an position of power, even at a European level, he could potentially influence in matters that would impact the industry in which Agrofert is active," Kotora cautioned.

Broad Reach 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 the property of 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 network of fertility centers, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.

The footprint of Babis into multiple areas of Czech life is extensive. And as prime minister, for the second time, it is about to get broader.