Czech Tycoon Takes Prime Ministerial Post, Vowing to Cut Business Holdings

Entrepreneur Andrej Babis has been sworn in as the nation's new head of government, with his full cabinet expected to be appointed in the coming days.

His confirmation followed a central condition from President Petr Pavel – a official assurance by Babis to cede command over his extensive agribusiness and chemical group, Agrofert.

"I commit to be a prime minister who upholds the interests of every citizen, domestically and internationally," declared 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 entire planet."

Lofty Ambitions and a Far-Reaching Corporate Footprint

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

Agrofert is so firmly entrenched in the Czech business landscape that there is even a specialized application to help shoppers avoid purchasing products made by the group's more than 200 subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – falls under an Agrofert company, a warning symbol shows up.

Babis, who held the role of prime minister for four years until 2021, has moved rightward in recent years and his cabinet will include members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.

The Commitment of Separation

If he upholds his vow to divest from the company he built from scratch, he will no longer benefit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

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

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 profit from, he adds.

Instead, he proposes that Agrofert, worth an estimated $4.3bn (£3.3bn), will be placed in a trust managed by an third-party manager, where it will stay until his death. Upon that event, it will pass to his children.

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

Unanswered Questions

The specific type of trust has yet to be clarified – a trust under Czech law, or one established overseas? The concept of a "blind trust" does not exist in Czech statutory law, and an team of legal experts will be necessary to design an solution that is functional.

Doubts from Observers

Critics, including Transparency International, remain unconvinced.

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

"There's no separation. He obviously knows the managers. He knows Agrofert's portfolio. From an executive position, even at a EU level, he could theoretically intervene in matters that would impact the industry in which Agrofert operates," Kotora warned.

Wide-Ranging Interests Beyond Agrofert

But it's not just food – and it's not just 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, controlled by Babis.

Hartenberg also operates a chain of reproductive clinics, as well as a florist chain, Flamengo, and an underwear retailer, Astratex.

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