A Czech Wealthy Magnate Assumes Prime Ministerial Role, Pledging to Cut Commercial Empire

Entrepreneur Andrej Babis has officially become the nation's new prime minister, with his government anticipated to assume their roles within days.

His selection came after a key condition from President Petr Pavel – a official vow by Babis to give up oversight over his sprawling food-processing, agriculture and chemicals conglomerate, Agrofert.

"I promise to be a prime minister who defends the interests of the entire populace, both locally and globally," affirmed Babis after the swearing-in at Prague Castle.

"A leader who will work to establish the Czech Republic the top destination to live on the whole globe."

Grand Visions and a Pervasive Business Presence

These are lofty ambitions, but Babis, 71, is used to thinking big.

Agrofert is so firmly entrenched in the Czech commercial ecosystem that there is even a dedicated app to help shoppers steer clear of purchasing products made by the group's more than 200 subsidiaries.

If a product – for example, Viennese-style sausages from Kostelecké uzeniny or packaged bread from Penam – is part of an Agrofert company, a negative symbol is displayed.

Babis, who held the role of prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will feature members of the right-wing SPD party and the Eurosceptic "Motorists for Themselves" party.

The Commitment of Separation

If he honors his pledge 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 states he will have no insight of the conglomerate's economic status, nor any ability to influence its prospects.

Governmental decisions on state contracts or subsidies – whether national or EU-funded – will be made without regard to a company he will have relinquished ownership of or gain financially from, he emphasizes.

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

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

Clarification Needed

The legal nature of this trust is still uncertain – a domestic trust, or one based abroad? The concept of a "blind trust" has no basis in Czech legislation, and an battalion of attorneys will be required to design an structure that is legally sound.

Doubts from Anti-Corruption Groups

Critics, including Transparency International, are still skeptical.

"A blind trust is not the answer," stated 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 range of businesses. From an high office, even at a EU level, he could theoretically intervene in matters that would affect the sector in which Agrofert operates," Kotora advised.

Wide-Ranging Interests Extending Past Agrofert

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

In the eastern suburbs 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 operates a network of fertility centers, as well as a flower shop network, 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.