Czech Billionaire Takes Prime Ministerial Role, Vowing to Sever Business Empire

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

His confirmation was contingent upon a fundamental condition from President Petr Pavel – a public commitment by Babis to give up control over his sprawling agribusiness and chemical group, Agrofert.

"I commit to be a prime minister who upholds the interests of every citizen, domestically and internationally," declared Babis following the ceremony at Prague Castle.

"A prime minister who will work to establish the Czech Republic the best place to live on the face of the Earth."

Lofty Ambitions and a Vast Corporate Footprint

These are lofty ambitions, but Babis, 71, is familiar with 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 numerous 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 appears.

Babis, who previously served as prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will include members of the right-wing SPD party and the Eurosceptic "Drivers for Themselves" party.

The Promise of Divestment

If he honors his promise to withdraw from the company he built from scratch, he will stop gaining from the sale of a single 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 power to affect its prospects.

Governmental decisions on state contracts or subsidies – whether Czech or European – will be made with no consideration for a company he will no longer own or gain financially from, he emphasizes.

Instead, he explains 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 pass to his children.

This arrangement, he stated in a Facebook video, went "far beyond" the stipulations of Czech law.

Unanswered Questions

What kind of trust is still uncertain – a trust under Czech law, or one based abroad? The concept of a "blind trust" has no basis in Czech legislation, and an team of legal experts will be required to devise an arrangement that works.

Skepticism from Watchdogs

Critics, including Transparency International, remain unconvinced.

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

"There's no separation. [Babis] is familiar with the managers. He knows Agrofert's range of businesses. From an position of power, even at a EU level, he could theoretically intervene in matters that would affect the sector in which Agrofert is active," Kotora cautioned.

Broad Reach Beyond Agrofert

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

In the outskirts of Prague, a private health clinic stands near 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 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 extensive. And as prime minister, for the second occasion, it is set to grow broader.