Czech Tycoon Assumes Prime Ministerial Role, Promising to Disentangle Commercial Interests

Tycoon Andrej Babis has officially become the Czech Republic's new premier, with his complete ministerial team slated to take their posts within days.

His confirmation followed a fundamental demand from President Petr Pavel – a official vow by Babis to cede command over his sprawling agribusiness and chemical group, Agrofert.

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

"A leader who will work to make the Czech Republic the finest location to live on the face of the Earth."

High Aspirations and a Pervasive Business Presence

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

Agrofert is so deeply embedded in the Czech commercial ecosystem that there is even a specialized application to help shoppers avoid purchasing products made by the group's over two hundred subsidiaries.

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

Babis, who was formerly prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will include members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party.

The Promise of Divestment

If he upholds his promise to separate himself from the company he founded and grew, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser.

As prime minister, he asserts he will have no information of the conglomerate's financial health, nor any power to sway its prospects.

Administrative 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 adds.

Instead, he proposes 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. At that point, it will transfer to his children.

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

Clarification Needed

The specific type of trust is still uncertain – a trust under Czech law, or one established overseas? The concept of a "fully independent trust" does not exist in Czech statutory law, and an battalion of attorneys will be needed to design an structure that is legally sound.

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 comment.

"There's no separation. He is familiar with the managers. He knows Agrofert's portfolio. From an high office, even at a European level, he could theoretically intervene in matters that would impact the industry in which Agrofert functions," Kotora advised.

Wide-Ranging Interests Beyond Agrofert

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

In the eastern suburbs 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 majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.

Hartenberg also operates a network of reproductive clinics, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.

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