A Czech Wealthy Magnate Secures Prime Ministerial Post, Pledging to Disentangle Business Holdings

Wealthy businessman Andrej Babis has officially become the Czech Republic's new prime minister, with his government anticipated to take their posts in the coming days.

His confirmation came after a key demand from President Petr Pavel – a official vow by Babis to give up oversight over his vast agribusiness and chemical group, Agrofert.

"I promise to be a prime minister who upholds the interests of the entire populace, domestically and internationally," declared Babis after the ceremony at Prague Castle.

"A prime minister who will work to make the Czech Republic the top destination to live on the entire planet."

Lofty Ambitions and a Pervasive Business Presence

These are lofty ambitions, but Babis, 71, is accustomed to large-scale thinking.

Agrofert is so deeply embedded in the Czech economic fabric that there is even a mobile tool to help shoppers steer clear of 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 is displayed.

Babis, who was formerly 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 "Drivers for Themselves" party.

The Commitment of Divestment

If he honors his pledge to withdraw from the company he established, he will stop gaining from the sale of a single 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 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 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 independent administrator, where it will stay until his death. At that point, it will transfer to his children.

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

Clarification Needed

The specific type of trust has yet to be clarified – a trust under Czech law, or one based abroad? The concept of a "fully independent trust" does not exist in Czech legislation, and an team of legal experts will be required to design an arrangement that is functional.

Doubts from Anti-Corruption Groups

Critics, including Transparency International, are still skeptical.

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

"True separation is absent. [Babis] is familiar with the managers. He knows Agrofert's holdings. From an executive position, even at a EU level, he could potentially influence in matters that would impact the industry in which Agrofert is active," Kotora advised.

Extensive Influence Extending Past Agrofert

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

In the outskirts of Prague, a medical facility stands near the O2 arena. While it is owned by a company called FutureLife a.s, that company is controlled by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis.

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

The influence of Babis into multiple areas of Czech life is extensive. And as prime minister, for the second occasion, it is about to get more extensive.