Czech Populist Prime Minister-Elect Declines to Divest Corporate Holdings During Ethical Dispute

Andrej Babiš, the self-styled billionaire who won the recent parliamentary vote, has refused to offload his extensive business interests, while asserting he will address a ethical dilemma that could prevent him from taking the position of prime minister.

Position on Corporate Empire

Babiš, whose political movement came first in the autumn vote but lacked a majority in parliament, declared in a online statement that he will not sell his Agrofert group, which operates in agriculture, food production, and chemicals.

“I have consistently stated I will not sell Agrofert. I have repeatedly said I will resolve the conflict of interest in accordance with Czech and EU regulations,” the billionaire remarked. “This is not like selling a pastry in a bakeshop.”

President's Requirement

The Czech president, Petr Pavel, stated that the 71-year-old populist must clarify openly how he will eliminate ethical conflicts arising from his business activities before being appointed prime minister.

The Czech constitution “explicitly requires the president to consider the potential occurrence of a ethical issue and the possibilities for its resolution” when appointing cabinet members, Pavel's office explained.

The head of state “expects clarity in what precise manner Andrej Babiš will fulfil his constitutional and legal obligations”, the announcement said, stating that Pavel was prepared to designate Babiš as premier “immediately” once the issue was settled.

Corporate Activities and Regulatory Concerns

Babiš's numerous companies, mostly under the Agrofert umbrella, function in the Czech Republic and other central European states, receiving substantial funds in domestic and European agricultural and other subsidies, as well as government deals.

Under Czech law, government ministers cannot receiving public aid or contracts. The ethics watchdog Transparency International has indicated that to avoid a conflict of interest, Babiš must either divest, refuse public contracts, or stay out of public office.

Previous Tenure and Current Plans

Babiš said he would “abide by the regulations” if appointed as prime minister, but did not want to explain how in beforehand because the matter was “an extremely sensitive and personal matter for me, and the media will invariably criticise me anyway”.

During his first term as premier, from 2017 to 2021, Babiš faced several legal battles and an EU investigation over potential conflicts of interest. He temporarily moved his assets into fiduciary arrangements, while keeping some influence over them.

A judicial body and the European Commission both ruled that this did not suffice. Babiš confirmed last month that he was again the sole owner of Agrofert and maintained he was “taking steps” to avoid a conflict of interest, but refused to disclose specifics.

Coalition Deal and Foreign Policy Consequences

The billionaire populist has concluded a coalition agreement with two rightwing fringe parties, the far-right, Russia-friendly SPD, which has advocated a public vote on leaving the EU, and the Motorists for Themselves, which has mainly campaigned against the EU’s Green Deal.

The incoming administration, if approved, is likely to bolster the populist bloc in the region and could challenge backing from Western nations for Ukraine – although Babiš has contacted Ukraine’s president, Volodymyr Zelenskyy, to assure him of the nation's backing.

Pavel, who as head of state has a role for international relations, also requested that the government agenda include a declaration on the government’s position on the conflict in Ukraine, with a pledge to fulfilling Nato obligations.

The head of state has previously stated he would not endorse any cabinet candidates who might doubt the Czech Republic’s EU and Nato commitments, a condition that the far-right SPD has said it will satisfy by nominating non-partisan experts.