🔗 Share this article A Czech Wealthy Magnate Takes Prime Ministerial Post, Pledging to Sever Corporate Holdings The incoming government is set to be markedly different from its strongly pro-Ukrainian forerunner. Wealthy businessman Andrej Babis has been sworn in as the Czech Republic's new premier, with his government anticipated to be appointed shortly. His selection was contingent upon a key demand from President Petr Pavel – a official assurance by Babis to relinquish control over his sprawling agribusiness and chemical conglomerate, Agrofert. "I commit to be a prime minister who champions 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 establish the Czech Republic the finest location to live on the entire planet." Grand Visions and a Pervasive Business Presence These are grandiose goals, but Babis, 71, is familiar with large-scale thinking. Agrofert is so deeply embedded in the Czech business landscape that there is even a specialized application to help shoppers steer clear of 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 – is part of an Agrofert company, a warning symbol shows up. Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will incorporate members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party. The Pledge of Divestment If he honors his promise to withdraw from the company he built from scratch, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser. As prime minister, he claims he will have no insight of the conglomerate's financial health, nor any capacity to affect its performance. Administrative decisions on government procurement or subsidies – whether Czech or European – will be made independently of a company he will have relinquished ownership of 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 autonomous trustee, where it will remain until his death. Then, it will transfer to his children. This arrangement, he stated in a Facebook video, went "far beyond" the demands of Czech law. Outstanding Issues What kind of trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The concept of a "fully independent trust" does not exist in Czech legislation, and an battalion of attorneys will be needed to craft an solution that is legally sound. Doubts from Watchdogs Watchdog organizations, including Transparency International, are still skeptical. "A blind trust is not a solution," stated David Kotora, the head of Transparency International's Czech branch, in an comment. "True separation is absent. [Babis] obviously knows the managers. He knows Agrofert's portfolio. From an executive position, even at a EU level, he could potentially influence in matters that would impact the sector in which Agrofert functions," Kotora warned. Broad Reach Beyond Agrofert But it's not just food – and it's not only Agrofert. In the eastern suburbs of Prague, a private health clinic 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 manages a chain of reproductive clinics, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex. The reach of Babis into multiple areas of Czech life is wide. And as prime minister, for the second occasion, it is set to grow even wider.
The incoming government is set to be markedly different from its strongly pro-Ukrainian forerunner. Wealthy businessman Andrej Babis has been sworn in as the Czech Republic's new premier, with his government anticipated to be appointed shortly. His selection was contingent upon a key demand from President Petr Pavel – a official assurance by Babis to relinquish control over his sprawling agribusiness and chemical conglomerate, Agrofert. "I commit to be a prime minister who champions 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 establish the Czech Republic the finest location to live on the entire planet." Grand Visions and a Pervasive Business Presence These are grandiose goals, but Babis, 71, is familiar with large-scale thinking. Agrofert is so deeply embedded in the Czech business landscape that there is even a specialized application to help shoppers steer clear of 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 – is part of an Agrofert company, a warning symbol shows up. Babis, who previously served as prime minister for four years until 2021, has moved rightward in recent years and his cabinet will incorporate members of the far-right SPD and the EU-skeptical "Drivers for Themselves" party. The Pledge of Divestment If he honors his promise to withdraw from the company he built from scratch, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser. As prime minister, he claims he will have no insight of the conglomerate's financial health, nor any capacity to affect its performance. Administrative decisions on government procurement or subsidies – whether Czech or European – will be made independently of a company he will have relinquished ownership of 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 autonomous trustee, where it will remain until his death. Then, it will transfer to his children. This arrangement, he stated in a Facebook video, went "far beyond" the demands of Czech law. Outstanding Issues What kind of trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The concept of a "fully independent trust" does not exist in Czech legislation, and an battalion of attorneys will be needed to craft an solution that is legally sound. Doubts from Watchdogs Watchdog organizations, including Transparency International, are still skeptical. "A blind trust is not a solution," stated David Kotora, the head of Transparency International's Czech branch, in an comment. "True separation is absent. [Babis] obviously knows the managers. He knows Agrofert's portfolio. From an executive position, even at a EU level, he could potentially influence in matters that would impact the sector in which Agrofert functions," Kotora warned. Broad Reach Beyond Agrofert But it's not just food – and it's not only Agrofert. In the eastern suburbs of Prague, a private health clinic 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 manages a chain of reproductive clinics, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex. The reach of Babis into multiple areas of Czech life is wide. And as prime minister, for the second occasion, it is set to grow even wider.