A Czech Billionaire Secures PM Role, Vowing to Cut Business Holdings

Entrepreneur Andrej Babis has been sworn in as the nation's new premier, with his government slated to take their posts in the coming days.

His appointment followed a central stipulation from President Petr Pavel – a formal vow by Babis to relinquish oversight over his sprawling food-processing, agriculture and chemicals holding company, Agrofert.

"I commit to be a prime minister who defends the interests of the entire populace, domestically and internationally," stated Babis following the swearing-in at Prague Castle.

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

High Aspirations and a Vast Corporate Footprint

These are grandiose goals, but Babis, 71, is used to large-scale thinking.

Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a specialized application to help shoppers avoid purchasing products made by the group's numerous subsidiaries.

If a product – for example, Viennese-style sausages from Kostelecké uzeniny or packaged bread from Penam – belongs to an Agrofert company, a thumbs-down symbol is displayed.

Babis, who previously served as 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 Eurosceptic "Motorists for Themselves" party.

The Pledge of Withdrawal

If he upholds his promise to withdraw from the company he founded and grew, 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 economic status, nor any ability to influence its fortunes.

State decisions on state contracts or subsidies – whether national or EU-funded – will be made independently of a company he will no longer own or profit from, he emphasizes.

Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a fiduciary structure managed by an autonomous trustee, where it will remain until his death. Then, it will be inherited by his children.

This arrangement, he stated in a Facebook video, went "well above" the demands of Czech law.

Unanswered Questions

The legal nature of this trust has yet to be clarified – a Czech trust, or one established overseas? The notion of a "fully independent trust" has no basis in Czech legislation, and an team of legal experts will be needed to design an arrangement that works.

Criticism from Anti-Corruption Groups

Skeptics, including Transparency International, continue to doubt.

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

"The divide is insufficient. [Babis] obviously knows 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 operates," Kotora warned.

Broad Reach Beyond Agrofert

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

In the eastern suburbs 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 operates a network of reproductive clinics, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.

The reach of Babis into multiple areas of Czech life is wide. And as prime minister, for the second occasion, it is poised to become even wider.