Czech Tycoon Assumes Prime Ministerial Post, Promising to Disentangle Business Holdings

Wealthy businessman Andrej Babis has officially become the Czech Republic's new prime minister, with his complete ministerial team expected to be appointed within days.

His appointment came after a central demand from President Petr Pavel – a official commitment by Babis to cede oversight over his extensive food-processing, agriculture and chemicals holding company, Agrofert.

"I commit to be a prime minister who champions the interests of the entire populace, both locally and globally," affirmed Babis after the ceremony at Prague Castle.

"A prime minister who will work to transform the Czech Republic the top destination to live on the face of the Earth."

Lofty Ambitions and a Far-Reaching Business Presence

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

Agrofert is so thoroughly integrated in the Czech economic fabric 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 thumbs-down symbol appears.

Babis, who was formerly prime minister for four years until 2021, has moved rightward in recent years and his cabinet will feature members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party.

The Pledge of Divestment

If he fulfills his promise to withdraw from the company he founded and grew, he will no longer benefit from the sale of any Agrofert product – from frankfurters to fertiliser.

As prime minister, he claims he will have no information of the conglomerate's economic status, nor any capacity to affect its performance.

Administrative decisions on public tenders or subsidies – whether national or EU-funded – will be made without regard to a company he will no longer own or profit from, he emphasizes.

Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be placed in a trust managed by an third-party manager, where it will stay 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

The legal nature of this trust has yet to be clarified – a Czech trust, or one established overseas? The concept of a "fully independent trust" does not exist in Czech legislation, and an army of lawyers will be necessary to design an solution that works.

Skepticism from Anti-Corruption Groups

Watchdog organizations, including Transparency International, remain unconvinced.

"A blind trust is an inadequate measure," stated 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 holdings. From an high office, even at a European level, he could theoretically intervene in matters that would affect the industry in which Agrofert functions," Kotora warned.

Extensive Influence Extending Past Agrofert

But it's not only food – and it's not only 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, majority-owned by Babis.

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

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