Entrepreneur Andrej Babis has been sworn in as the Czech Republic's new head of government, with his government anticipated to take their posts within days.
His appointment came after a fundamental demand from President Petr Pavel – a official vow by Babis to relinquish command over his sprawling food-processing, agriculture and chemicals conglomerate, Agrofert.
"I commit to be a prime minister who defends the interests of the entire populace, both locally and globally," affirmed Babis following the event at Prague Castle.
"A prime minister who will work to establish the Czech Republic the best place to live on the entire planet."
Lofty Ambitions and a Vast Corporate Footprint
These are grandiose goals, but Babis, 71, is used to thinking big.
Agrofert is so firmly entrenched in the Czech economic fabric that there is even a dedicated app to help shoppers steer clear of 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 appears.
Babis, who held the role of prime minister for four years until 2021, has adopted more right-leaning positions in recent years and his cabinet will include members of the far-right SPD and the Eurosceptic "Motorists for Themselves" party.
The Commitment of Withdrawal
If he upholds his vow to divest from the company he founded and grew, he will stop gaining from the sale of any Agrofert product – ranging from processed meats to agricultural chemicals.
As prime minister, he claims he will have no insight of the conglomerate's fiscal condition, nor any ability to sway its fortunes.
State decisions on state contracts or subsidies – whether Czech or European – will be made with no consideration for a company he will no longer own or profit from, he further notes.
Instead, he explains that Agrofert, valued at $4.3bn (£3.3bn), will be transferred to a fiduciary structure managed by an independent administrator, where it will remain until his death. Then, it will be inherited by his children.
This arrangement, he remarked in a social media post, went "exceeded" the requirements of Czech law.
Outstanding Issues
The legal nature of this trust is still uncertain – a trust under Czech law, or one based abroad? The notion of a "blind trust" is not recognized in Czech statutory law, and an battalion of attorneys will be required to devise an solution that is legally sound.
Criticism from Observers
Skeptics, including Transparency International, are still skeptical.
"A blind trust is not a solution," stated David Kotora, the head of Transparency International's Czech branch, in an interview.
"The divide is insufficient. [Babis] obviously knows the managers. He knows Agrofert's holdings. From an high office, even at a EU level, he could possibly act in matters that would impact the industry in which Agrofert operates," Kotora cautioned.
Wide-Ranging Interests Extending Past Agrofert
But it's not just food – and it's not just Agrofert.
In the outskirts of Prague, a medical facility towers over 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, majority-owned by Babis.
Hartenberg also operates a chain of fertility centers, as well as a flower shop network, Flamengo, and an lingerie store chain, Astratex.
The reach of Babis into every facet of Czech life is extensive. And as prime minister, for the second occasion, it is set to grow broader.
