Czech Billionaire Secures Prime Ministerial Post, Vowing to Cut Business Empire

Wealthy businessman Andrej Babis has officially become the nation's new premier, with his government expected to assume their roles within days.

His confirmation followed a fundamental stipulation from President Petr Pavel – a official vow by Babis to cede control over his extensive agribusiness and chemical conglomerate, Agrofert.

"I commit to be a prime minister who defends the interests of all our citizens, domestically and internationally," affirmed Babis after the event at Prague Castle.

"A leader who will work to transform the Czech Republic the best place to live on the face of the Earth."

Grand Visions and a Far-Reaching Corporate Footprint

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 avoid purchasing products made by the group's over two hundred subsidiaries.

If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – belongs to an Agrofert company, a warning 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 right-wing SPD party and the Eurosceptic "Motorists for Themselves" party.

The Pledge of Withdrawal

If he upholds his promise to separate himself from the company he established, he will cease to profit from the sale of a single Agrofert product – from frankfurters to fertiliser.

As prime minister, he claims he will have no knowledge of the conglomerate's economic status, nor any ability to influence its performance.

Governmental decisions on government procurement or subsidies – whether Czech or European – will be made without regard to 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 third-party manager, where it will stay until his death. Upon that event, it will pass to his children.

This arrangement, he remarked in a online address, went "exceeded" the demands of Czech law.

Outstanding Issues

The legal nature of this trust is still uncertain – a Czech trust, or one established overseas? The legal framework of a "fully independent trust" has no basis in Czech statutory law, and an army of lawyers will be required to devise an solution that is legally sound.

Skepticism from Watchdogs

Skeptics, including Transparency International, continue to doubt.

"A blind trust is not a solution," said 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 portfolio. From an high office, even at a EU level, he could potentially influence in matters that would affect the industry in which Agrofert operates," Kotora cautioned.

Broad Reach Extending Past Agrofert

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

In the eastern suburbs of Prague, a medical facility towers over 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, controlled by Babis.

Hartenberg also runs a chain of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.

The footprint of Babis into all corners of Czech life is extensive. And as prime minister, for the second occasion, it is set to grow more extensive.