ANO leader and incoming Czech PM Andrej Babis has pledged to give up his Agrofert holding to meet the conflict of interest law, he announced in a video on social media yesterday, adding that he will have nothing further to do with the company, even after he leaves politics.
In response, President Petr Pavel announced on social media that he will appoint Babis as prime minister on Tuesday, 9 December, appreciating that Babis had fulfilled his agreement to state publicly how his conflict of interest would be resolved.
The holding’s shares will be managed through a trust structure by an independent administrator and controlled by an independent protector, both to be appointed independently. The condition is that neither the administrator nor the protector will be a family member, or anyone else connected with Agrofert or dependent on the company or Babis. Babis’s descendants will acquire Agrofert only after his death.
According to Babis, the steps go far beyond the requirements of the law.
President Pavel had demanded that billionaire businessman Babis publicly announce how he would resolve the conflict of interest before being appointed prime minister. Following Babis’s announcement yesterday, the appointment will now take place next Tuesday, with the remaining members of the government composed of ANO, Freedom and Direct Democracy (SPD) and the Motorists taking office the following week.
“I appreciate the clear and understandable way in which Andrej Babis has lived up to our agreement and publicly announced the way in which he will resolve his conflict of interest,” Pavel said. “I have therefore decided to appoint him as Prime Minister on Tuesday, 9 December, at 9 am. In doing so, I respect the results of the elections to the Chamber of Deputies of the Parliament and the course of negotiations on the formation of a coalition government.”
“With this I have fulfilled the requirement that was a condition of the president for my appointment as prime minister,” Babis said. “I clearly promised before the elections that I would resolve it so that there was no doubt that I have fulfilled all the conditions of Czech and European law.”
He said his future had been decided by voters, who made it clear who they wanted as prime minister. “Surely I could have left politics after winning the elections and had a comfortable life, or ANO could have appointed someone else as prime minister. But I am convinced that you would see that as a betrayal,” said Babis, who was previously PM from 2017-2021, and whose ANO comfortably won the 3-4 October parliamentary elections.
He said that he had decided to take a step he never thought he would take.
“I have decided to irrevocably give up the Agrofert company, which I will have nothing more to do with. I will no longer own it, I will no longer have any economic relations with it and I will no longer have any contact with it,” he said, adding that the move was not easy for him because he had spent half his life building the company.
“The rules of operation contained in the statutes of the fund and the person of the trust fund administrator will ensure independent management of Agrofert shares and exclude that I will benefit from the shares in the future. I will therefore not be a beneficiary or ultimate owner. Similarly, my children and my wife will not have any influence on Agrofert and will not benefit financially,” Babis added.
This is an irreversible solution, and the shares will never be returned to him, he said. “My children will only acquire Agrofert after my death,” he stated.
“From the outset, the President has demanded, in accordance with the Constitution, that the future prime minister clearly and publicly announce how he will resolve this conflict and how he will comply with the law,” said the Presidential Office (KPR) in a statement available to CTK.
It said the president cannot be the arbiter of the chosen solution, nor does he have constitutional powers that would entitle him to review the proposed solution.
KPR said Pavel saw Babis’s chosen solution as a public commitment made not only to him, but above all to the Czech public. According to Pavel, the way the whole process is carried out will also be important.
Opposition politicians welcomed Babis’s announcement, but added that it will be necessary to closely monitor whether his actual steps correspond to the announced solution.
TOP 09 leader Matej Ondrej Havel noted that Babis has had years to come up with a solution. “Now he is under pressure to announce changes, the details of which we will learn as we go along,” he said. “And once again we are dependent on the word of a man who has repeatedly proven to be a liar. Therefore, it will be necessary to scrutinise his every move.”
Marek Vyborny, leader of the Christian Democrats (KDU-CSL), said it would be important to see that the announced measures become reality. “We have repeatedly witnessed that he said something and then it happened differently or not at all,” he said.
Vyborny also noted that there was no information on when Babis would take the announced steps, and moreover that the move does not erase Babis’s past conflicts of interest. He said that Babis would be entering the government with a truly clean slate if he returned unjustified subsidies paid in the past and withdrew his lawsuits against the Czech Republic.
Pirate Party leader Zdenek Hrib said the blind trust fund, which will prospectively be passed on to Babis’s children, may still leave the government with an incentive to make decisions beneficial to Agrofert.
“The only way he (Babis) could ‘permanently’ and cleanly resolve the conflict of interest is to sell Agrofert or not be prime minister,” Hrib wrote on social media. He said the procedure must be examined in detail. “Andrej Babis is very good at circumventing the rules so that in the end it is mainly he himself who benefits in the end. He is also very good at lying,” Hrib added.
Prominent lawyers cautiously welcomed Babis’s announcement, but also warned that the proof of the resolution would be in the details.
According to constitutional lawyer Jan Kudrna, Babis’s solution is more than sufficient in terms of constitutional law. “A conflict of interests, from what I understand from Andrej Babis’s statement, is absolutely excluded,” he told Czech Television. Among other things, he noted consistency in the fact that Babis is also leaving the Agrofert Foundation’s board of directors.
“So it cannot even be argued that there is some kind of a side road here, that he could perhaps benefit through this foundation. From my point of view, there was no more that could have been done,” said Kudrna. He added that if some deception were to arise regarding the proposed solution, it would constitute a political fraud of a scale never before seen in the Czech Republic, triggering “an absolute political crisis that would bring down Andrej Babis and his government.”
Ondrej Preuss, another constitutional lawyer, told CTK that Babis’s announcement showed his effort to resolve the matter. “If the entire concern is put into a trust that Babis will never get access to again and only after his death will his descendants gain control, it seems to me to be a rather generous solution,” he said. However, he said, it could also be argued that in the case of such a large company operating in such a clearly defined market segment, the prime minister will always know what decision will benefit the company.
According to Trinity Bank’s chief economist Lukas Kovanda, Babis’s move seems sufficient to open the way to the prime minister’s seat without clashing with legislation. “It even appears that Babis is going further than the relevant legislation calls for. This may be due to the complexity of the matter and the fact that no other solution acceptable to both him and Agrofert has been found,” Kovanda said.
Agrofert Holding operates in the agriculture, food and chemical sectors. It brings together about 200 companies in the Czech Republic and abroad, including the chemical companies Deza, Fatra, Lovochemie and Precheza, and the food companies Kostelecke uzeniny, Krahulik and Penam. It employs 29,000 people, including about 18,000 in the Czech Republic, where it is one of the largest private employers.
Agrofert Holding’s profit rose by CZK 5 billion last year, to CZK 7.1 billion, due to the sale of the Mafra media group, the Londa company operating radio stations, and the Pardubice chemical company Synthesia. The company’s revenues were stable at CZK 212 billion.
Babis’s investments are managed by the Hartenberg fund. Babis, through his company SynBiol, holds an 87.75% stake in the Hartenberg Holding investment group; another 9.75% is owned by Jozef Janov and the remaining share belongs to Agrofert’s head of acquisitions Libor Nemecek. Hartenberg also invests in reproductive clinics, real estate, food and clothing brands, and controls the Flamengo florist chain and the Oveckarna.cz and Sportobchod.cz e-shops.
