Czech Billionaire Secures Prime Ministerial Post, Promising to Cut Commercial Empire

Entrepreneur Andrej Babis has officially become the Czech Republic's new premier, with his full cabinet anticipated to be appointed within days.

His appointment followed a fundamental condition from President Petr Pavel – a official vow by Babis to cede control over his vast food-processing, agriculture and chemicals holding company, Agrofert.

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

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

High Aspirations and a Far-Reaching Business Presence

These are grandiose goals, but Babis, 71, is accustomed to ambitious plans.

Agrofert is so firmly entrenched in the Czech business landscape that there is even a dedicated app to help shoppers steer clear of purchasing products made by the group's over two hundred subsidiaries.

If a product – for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – belongs to an Agrofert company, a negative symbol appears.

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

The Pledge of Separation

If he upholds his promise to withdraw from the company he built from scratch, he will no longer benefit from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he states he will have no information of the conglomerate's economic status, nor any power to sway its fortunes.

State decisions on government procurement or subsidies – whether national or EU-funded – will be made with no consideration for a company he will no longer own or profit from, he adds.

Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a trust managed by an third-party manager, where it will remain until his death. Then, it will be inherited by his children.

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

Clarification Needed

The specific type of trust has yet to be clarified – a domestic trust, or one based abroad? The notion of a "fully independent trust" is not recognized in Czech legislation, and an battalion of attorneys will be required to craft an solution that works.

Skepticism from Watchdogs

Watchdog organizations, including Transparency International, remain unconvinced.

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

"The divide is insufficient. [Babis] obviously knows the managers. He knows Agrofert's range of businesses. From an high office, even at a European level, he could possibly act in matters that would impact the industry in which Agrofert functions," 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 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 operates a network of fertility centers, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.

The reach of Babis into every facet of Czech life is broad. And as prime minister, for the second occasion, it is set to grow broader.