🔗 Share this article A Czech Tycoon Assumes Prime Ministerial Office, Vowing to Sever Business Holdings Andrej Babis's government will be a clear departure compared to its firmly Ukraine-supporting predecessor. Entrepreneur Andrej Babis has officially become the Czech Republic's new prime minister, with his government expected to take their posts in the coming days. His selection was contingent upon a central condition from President Petr Pavel – a public assurance by Babis to relinquish command over his sprawling food-processing, agriculture and chemicals group, Agrofert. "I promise to be a prime minister who upholds the interests of all our citizens, at home and abroad," stated Babis following the event at Prague Castle. "A prime minister who will work to make the Czech Republic the top destination to live on the whole globe." Lofty Ambitions and a Vast Business Presence These are lofty ambitions, but Babis, 71, is familiar with large-scale thinking. 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 sliced bread from Penam – is part of an Agrofert company, a negative symbol appears. Babis, who held the role of prime minister for four years until 2021, has moved rightward in recent years and his cabinet will include members of the right-wing SPD party and the EU-skeptical "Drivers for Themselves" party. The Pledge of Separation If he honors his vow to separate himself from the company he founded and grew, 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 knowledge of the conglomerate's fiscal condition, nor any ability to affect its prospects. State decisions on public tenders or subsidies – whether national or EU-funded – will be made independently of a company he will have severed ties with or profit from, he emphasizes. Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an third-party manager, where it will stay until his death. Then, it will pass to his children. This arrangement, he stated in a Facebook video, went "far beyond" the requirements of Czech law. Unanswered Questions The legal nature of this trust has yet to be clarified – a Czech trust, or one in a foreign jurisdiction? The concept of a "fully independent trust" has no basis in Czech statutory law, and an army of lawyers will be necessary to design an arrangement that is legally sound. Criticism from Anti-Corruption Groups Critics, including Transparency International, remain unconvinced. "Such a trust is not a solution," said David Kotora, the head of Transparency International's Czech branch, in an statement. "True separation is absent. [Babis] obviously knows the managers. He knows Agrofert's holdings. From an position of power, even at a European level, he could potentially influence in matters that would impact the industry in which Agrofert is active," Kotora cautioned. Extensive Influence Beyond Agrofert But it's not only food – and it's not just 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 majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis. Hartenberg also manages a network of fertility centers, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex. The reach of Babis into every facet of Czech life is wide. And as prime minister, for the second occasion, it is set to grow even wider.
Andrej Babis's government will be a clear departure compared to its firmly Ukraine-supporting predecessor. Entrepreneur Andrej Babis has officially become the Czech Republic's new prime minister, with his government expected to take their posts in the coming days. His selection was contingent upon a central condition from President Petr Pavel – a public assurance by Babis to relinquish command over his sprawling food-processing, agriculture and chemicals group, Agrofert. "I promise to be a prime minister who upholds the interests of all our citizens, at home and abroad," stated Babis following the event at Prague Castle. "A prime minister who will work to make the Czech Republic the top destination to live on the whole globe." Lofty Ambitions and a Vast Business Presence These are lofty ambitions, but Babis, 71, is familiar with large-scale thinking. 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 sliced bread from Penam – is part of an Agrofert company, a negative symbol appears. Babis, who held the role of prime minister for four years until 2021, has moved rightward in recent years and his cabinet will include members of the right-wing SPD party and the EU-skeptical "Drivers for Themselves" party. The Pledge of Separation If he honors his vow to separate himself from the company he founded and grew, 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 knowledge of the conglomerate's fiscal condition, nor any ability to affect its prospects. State decisions on public tenders or subsidies – whether national or EU-funded – will be made independently of a company he will have severed ties with or profit from, he emphasizes. Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an third-party manager, where it will stay until his death. Then, it will pass to his children. This arrangement, he stated in a Facebook video, went "far beyond" the requirements of Czech law. Unanswered Questions The legal nature of this trust has yet to be clarified – a Czech trust, or one in a foreign jurisdiction? The concept of a "fully independent trust" has no basis in Czech statutory law, and an army of lawyers will be necessary to design an arrangement that is legally sound. Criticism from Anti-Corruption Groups Critics, including Transparency International, remain unconvinced. "Such a trust is not a solution," said David Kotora, the head of Transparency International's Czech branch, in an statement. "True separation is absent. [Babis] obviously knows the managers. He knows Agrofert's holdings. From an position of power, even at a European level, he could potentially influence in matters that would impact the industry in which Agrofert is active," Kotora cautioned. Extensive Influence Beyond Agrofert But it's not only food – and it's not just 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 majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, controlled by Babis. Hartenberg also manages a network of fertility centers, as well as a florist chain, Flamengo, and an lingerie store chain, Astratex. The reach of Babis into every facet of Czech life is wide. And as prime minister, for the second occasion, it is set to grow even wider.