Tycoon Andrej Babis has been sworn in as the Czech Republic's new prime minister, with his government slated to be appointed shortly.
His confirmation was contingent upon a key stipulation from President Petr Pavel – a formal assurance by Babis to cede oversight over his vast food-processing, agriculture and chemicals group, Agrofert.
"I commit 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 prime minister who will work to establish the Czech Republic the top destination to live on the whole globe."
High Aspirations and a Far-Reaching Business Presence
These are grandiose goals, but Babis, 71, is familiar with large-scale thinking.
Agrofert is so thoroughly integrated in the Czech commercial ecosystem 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, Viennese-style sausages from Kostelecké uzeniny or sliced bread from Penam – is part of an Agrofert company, a thumbs-down symbol appears.
Babis, who previously served as 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 Commitment of Separation
If he fulfills his vow to divest from the company he founded and grew, he will cease to profit from the sale of a single Agrofert product – from frankfurters to fertiliser.
As prime minister, he asserts he will have no insight of the conglomerate's financial health, nor any ability to influence its fortunes.
Administrative decisions on public tenders 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 transferred to a trust managed by an independent administrator, where it will stay until his death. Then, it will transfer to his children.
This arrangement, he commented in a online address, went "well above" the demands of Czech law.
Clarification Needed
What kind of trust has yet to be clarified – a domestic trust, or one established overseas? The concept of a "fully independent trust" has no basis in Czech legislation, and an army of lawyers will be required to devise an solution that works.
Criticism from Observers
Watchdog organizations, 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. [Babis] obviously knows the managers. He knows Agrofert's holdings. From an position of power, even at a European level, he could theoretically intervene in matters that would impact the sector in which Agrofert is active," Kotora advised.
Wide-Ranging Interests 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 majority-owned 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 multiple areas of Czech life is wide. And as prime minister, for the second time, it is poised to become even wider.
