Wealthy businessman Andrej Babis has officially become the Czech Republic's new prime minister, with his government slated to be appointed within days.
His confirmation was contingent upon a central stipulation from President Petr Pavel – a formal assurance by Babis to relinquish control over his vast food-processing, agriculture and chemicals group, Agrofert.
"I promise to be a prime minister who upholds the interests of every citizen, both locally and globally," stated Babis following the event at Prague Castle.
"A leader who will work to transform the Czech Republic the best place to live on the whole globe."
Grand Visions and a Far-Reaching Corporate Footprint
These are high-reaching aspirations, but Babis, 71, is familiar with thinking big.
Agrofert is so thoroughly integrated 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 numerous subsidiaries.
If a product – for example, Viennese-style sausages from Kostelecké uzeniny or packaged bread from Penam – is part of an Agrofert company, a thumbs-down symbol shows up.
Babis, who was formerly prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will include members of the right-wing SPD party and the Eurosceptic "Motorists for Themselves" party.
The Pledge of Separation
If he upholds his pledge to divest from the company he established, he will stop gaining from the sale of any Agrofert product – from frankfurters to fertiliser.
As prime minister, he asserts he will have no information of the conglomerate's economic status, nor any power to influence its performance.
Governmental decisions on public tenders or subsidies – whether Czech or European – will be made with no consideration for a company he will have relinquished ownership of or profit from, he further notes.
Instead, he explains that Agrofert, worth an estimated $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an independent administrator, where it will remain until his death. Upon that event, it will be inherited by his children.
This arrangement, he stated in a social media post, went "exceeded" the stipulations of Czech law.
Unanswered Questions
What kind of trust remains unclear – a domestic trust, or one established overseas? The concept of a "fully independent trust" is not recognized in Czech statutory law, and an army of lawyers will be required to craft an solution that is functional.
Skepticism from Observers
Watchdog organizations, including Transparency International, remain unconvinced.
"A blind trust is an inadequate measure," argued David Kotora, the head of Transparency International's Czech branch, in an statement.
"There's no separation. [Babis] undoubtedly is acquainted with the managers. He knows Agrofert's portfolio. From an position of power, even at a European level, he could theoretically intervene in matters that would affect the industry in which Agrofert functions," Kotora cautioned.
Extensive Influence Extending Past 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 majority-owned by Hartenberg Holding, and Hartenberg Holding is, in turn, majority-owned by Babis.
Hartenberg also operates a chain of fertility centers, as well as a flower shop network, Flamengo, and an underwear retailer, Astratex.
The influence of Babis into multiple areas of Czech life is extensive. And as prime minister, for the second time, it is set to grow even wider.
