Czech billionaire becomes PM with promise to cut ties to business empire
Billionaire Andrej Babis has been appointed as the new prime minister of the Czech Republic and his entire cabinet is expected to take office within days.
His appointment followed an important request from President Petr Pavel; Babis has made a public promise to relinquish control over his vast food processing, agriculture and chemicals conglomerate Agrofert.
Speaking after the ceremony at Prague Castle, Babis said, “I promise to be a prime minister who defends the interests of all our citizens at home and abroad.” he said.
“A prime minister who will work to make the Czech Republic the best place to live on the entire planet.”
These are big goals, but 71-year-old Babis is used to thinking big.
Agrofert is so deeply embedded in the Czech business ecosystem that it even has an app to help shoppers avoid buying products produced by the group’s 200-plus subsidiaries.
If a product (for example, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam) belongs to an Agrofert company, a thumbs-up icon appears.
Babis, who was prime minister for four years until 2021, has moved to the right in recent years and his cabinet will include members of the far-right SPD and the Eurosceptic “Bikers For Themselves” party.
If he fulfills his promise to leave the company he founded from scratch, he will no longer be able to benefit from the sales of any Agrofert products, from sausages to fertilizer.
As prime minister, he says, he would have no knowledge of the conglomerate’s finances or the ability to influence its fortunes.
[Sean Gallup/Getty Images]
He added that government decisions regarding Czech or European public tenders or subsidies would be taken regardless of a company it would no longer own or profit from.
Instead, he says Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a foundation run by an independent director and will remain there until his death. Then it will be passed on to your children.
He said in a Facebook video that this went “well beyond” the demands of Czech law.
What kind of trust remains unclear; Is it a check trust or a trust established abroad? The concept of “blind trust” does not exist in Czech legislation and an army of lawyers would be needed to design a working regulation.
Critics, including Transparency International, were not convinced.
“Blind trust is not the solution,” David Kotora, head of the Czech branch of Transparency International, told the Seznam Zpravy news site.
“There is no separation. [Babis] He obviously knows the managers. He knows Agrofert’s portfolio. From a managerial position, even at European level, he can theoretically intervene in matters that will affect the sector in which Agrofert operates,” Kotora warned.
But it’s not just food, and it’s not just Agrofert.
In the eastern suburbs of Prague, a private health clinic rises above the O2 arena. Although it belongs to a company called FutureLife as, the majority shares of this company belong to Hartenberg Holding, and the majority shares of Hartenberg Holding belong to Babis.
Hartenberg also runs a network of fertility clinics, as well as the Flamengo florist chain and the Astratex underwear retailer.
Babis’s reach into every corner of Czech life is extensive. And in his second time as prime minister, this is about to get even bigger.
