🔗 Share this article A Czech Tycoon Assumes PM Office, Promising to Cut Corporate Interests Andrej Babis's government represents markedly different compared to its strongly pro-Ukrainian previous government. Entrepreneur Andrej Babis has officially become the nation's new premier, with his government expected to take their posts within days. His appointment came after a key demand from President Petr Pavel – a official assurance by Babis to relinquish command over his sprawling agribusiness and chemical holding company, Agrofert. "I commit to be a prime minister who upholds the interests of every citizen, domestically and internationally," stated Babis after the ceremony at Prague Castle. "A leader who will work to establish the Czech Republic the top destination to live on the face of the Earth." Lofty Ambitions and a Vast Corporate Footprint These are lofty ambitions, but Babis, 71, is accustomed to thinking big. Agrofert is so thoroughly integrated in the Czech business landscape that there is even a dedicated app to help shoppers avoid purchasing products made by the group's more than 200 subsidiaries. If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – falls under an Agrofert company, a negative symbol shows up. Babis, who held the role of 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 "Motorists for Themselves" party. The Pledge of Divestment If he fulfills his promise to separate himself from the company he built from scratch, he will stop gaining from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals. As prime minister, he asserts he will have no insight of the conglomerate's fiscal condition, nor any ability to influence its prospects. 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 gain financially from, he emphasizes. Instead, he says 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 commented in a Facebook video, went "well above" the requirements of Czech law. Unanswered Questions The legal nature of this trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The legal framework of a "blind trust" has no basis in Czech legislation, and an battalion of attorneys will be necessary to devise an solution that is functional. Skepticism from Observers Skeptics, including Transparency International, are still skeptical. "A blind trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an comment. "There's no separation. He undoubtedly is acquainted with the managers. He knows Agrofert's portfolio. From an executive position, even at a EU level, he could theoretically intervene in matters that would affect the industry in which Agrofert operates," Kotora advised. Broad Reach Extending Past Agrofert But it's not only 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 network of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex. The influence of Babis into all corners of Czech life is extensive. And as prime minister, for the second occasion, it is poised to become more extensive.
Andrej Babis's government represents markedly different compared to its strongly pro-Ukrainian previous government. Entrepreneur Andrej Babis has officially become the nation's new premier, with his government expected to take their posts within days. His appointment came after a key demand from President Petr Pavel – a official assurance by Babis to relinquish command over his sprawling agribusiness and chemical holding company, Agrofert. "I commit to be a prime minister who upholds the interests of every citizen, domestically and internationally," stated Babis after the ceremony at Prague Castle. "A leader who will work to establish the Czech Republic the top destination to live on the face of the Earth." Lofty Ambitions and a Vast Corporate Footprint These are lofty ambitions, but Babis, 71, is accustomed to thinking big. Agrofert is so thoroughly integrated in the Czech business landscape that there is even a dedicated app to help shoppers avoid purchasing products made by the group's more than 200 subsidiaries. If a product – for example, frankfurters from Kostelecké uzeniny or sliced bread from Penam – falls under an Agrofert company, a negative symbol shows up. Babis, who held the role of 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 "Motorists for Themselves" party. The Pledge of Divestment If he fulfills his promise to separate himself from the company he built from scratch, he will stop gaining from the sale of a single Agrofert product – ranging from processed meats to agricultural chemicals. As prime minister, he asserts he will have no insight of the conglomerate's fiscal condition, nor any ability to influence its prospects. 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 gain financially from, he emphasizes. Instead, he says 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 commented in a Facebook video, went "well above" the requirements of Czech law. Unanswered Questions The legal nature of this trust is still uncertain – a domestic trust, or one in a foreign jurisdiction? The legal framework of a "blind trust" has no basis in Czech legislation, and an battalion of attorneys will be necessary to devise an solution that is functional. Skepticism from Observers Skeptics, including Transparency International, are still skeptical. "A blind trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an comment. "There's no separation. He undoubtedly is acquainted with the managers. He knows Agrofert's portfolio. From an executive position, even at a EU level, he could theoretically intervene in matters that would affect the industry in which Agrofert operates," Kotora advised. Broad Reach Extending Past Agrofert But it's not only 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 network of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex. The influence of Babis into all corners of Czech life is extensive. And as prime minister, for the second occasion, it is poised to become more extensive.