Czech Tycoon Assumes Prime Ministerial Role, Promising to Sever Business Holdings

Wealthy businessman Andrej Babis has been sworn in as the Czech Republic's new head of government, with his complete ministerial team slated to be appointed in the coming days.

His confirmation was contingent upon a fundamental demand from President Petr Pavel – a official assurance by Babis to cede control over his sprawling agribusiness and chemical group, Agrofert.

"I promise to be a prime minister who champions the interests of all our citizens, domestically and internationally," affirmed Babis following the swearing-in at Prague Castle.

"A leader who will work to transform the Czech Republic the finest location to live on the entire planet."

Grand Visions and a Far-Reaching Business Presence

These are grandiose goals, but Babis, 71, is familiar with thinking big.

Agrofert is so firmly entrenched in the Czech economic fabric that there is even a mobile tool to help shoppers bypass 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 previously served as prime minister for four years until 2021, has shifted to the right in recent years and his cabinet will feature members of the far-right SPD and the Eurosceptic "Drivers for Themselves" party.

The Commitment of Withdrawal

If he fulfills his promise to divest from the company he built from scratch, he will cease to profit from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals.

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

Administrative decisions on state contracts or subsidies – whether national or EU-funded – will be made independently of a company he will have severed ties with or gain financially from, he emphasizes.

Instead, he says that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to 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 remarked in a social media post, went "far beyond" the requirements of Czech law.

Unanswered Questions

The legal nature of this trust has yet to be clarified – a domestic trust, or one based abroad? The notion of a "blind trust" has no basis in Czech legislation, and an battalion of attorneys will be required to craft an arrangement that is legally sound.

Doubts from Watchdogs

Critics, including Transparency International, remain unconvinced.

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

"True separation is absent. [Babis] is familiar with the managers. He knows Agrofert's range of businesses. From an executive position, even at a EU level, he could theoretically intervene in matters that would affect the industry in which Agrofert functions," Kotora advised.

Wide-Ranging Interests Extending Past Agrofert

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

In the eastern suburbs of Prague, a private health clinic 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, 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 reach of Babis into all corners of Czech life is broad. And as prime minister, for the second time, it is poised to become even wider.